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(2004) 16 SAcLJ Enforcement Against Judgment Debtor’s Earnings 27

SECTION 13 OF THE SUPREME COURT OF JUDICATURE ACT AND ENFORCEMENT AGAINST THE JUDGMENT DEBTOR’S EARNINGS

A garnishee order may not be made against the salary of a judgment debtor because s 13(c) of the Supreme Court of Judicature Act (Cap 322, 1999 Rev Ed) (“the SCJA”) prohibits the attachment of salaries by writ of seizure of sale and this bar extends to the garnishee process. So held the High Court in American Express Ltd v Abdul Manaff bin Ahmad [2003] 4 SLR 780. The purpose of this article is to consider the ramifications of this judgment, the difficulties raised by s 13 of the SCJA, and the desirability of statutory reform.

Jeffrey PINSLER LLB (Liverpool), LLM (Cambridge), LLD (Liverpool); Barrister (Middle Temple); Advocate & Solicitor (Singapore); Professor, Faculty of Law, National University of Singapore.

Introduction

1 The issue of whether a garnishee order pursuant to O 49 of the Rules of Court (“RC”) may be obtained against a judgment debtor’s salary (which has become “due and payable”) was settled by the High Court in American Express Bank Ltd v Abdul Manaff bin Ahmad.1 The court decided that s 13(c) of the Supreme Court of Judicature Act (Cap 322, 1999 Rev Ed) (“SCJA”), which exempts the “ or salary2 of the judgment debtor” from seizure, is applicable to the garnishee process.3 The decision highlights an area of law which has been clouded by awkward legislative terminology and the peculiar historical development of the enforcement process in Singapore. However, the position taken by the court – achieved through a purposive interpretation of the legislation – must not detract from the need to consider statutory reform in the of clarity and the desirability of the attachment of earnings as an enforcement process in Singapore.

1 American Express Bank Ltd v Abdul Manaff bin Ahmad [2003] 4 SLR 780. 2 For the purpose of this article, the terms “wages” and “salary” are used interchangeably unless the context requires otherwise. 3 Affirming the decision of the District Judge on appeal from the Deputy Registrar ([2003] SGDC 233). 28 Singapore Academy of Law Journal (2004)

Developments in England

2 The enforcement of a judgment for the payment of money by a writ requiring the seizure and sale of the judgment debtor’s physical goods and chattels had been long established at common law by the time that the writ was extended in 1838 by s 12 of the Judgments Act4 to cover money, securities and other choses in action. Known then and now as the writ of fieri facias (commonly referred to as the “writ of fi fa”),5 it commands the Sheriff6 to seize in execution, such of the goods7 of the debtor within the county (for which the Sheriff is responsible) “as may be sufficient to satisfy the amount of the judgment …”.8 The attachment of a debt was an entirely separate procedure not involving the writ. Introduced in 1854 by the Common Law Procedure Act (CLPA, 1854),9 it enabled the judgment creditor to enforce his judgment for money by attachment of a debt due from a third party to the judgment debtor.10 It was a different species to the writ of fi fa because of its own particular procedural mechanism and because the court would only grant the order as a matter of discretion. In contradistinction, the writ of fi fa could be issued without the leave of court11 as soon as judgment was given.12 An Order in Council extended the CLPA, 1854 to other courts13 with the consequential effect that including salaries (due and payable) became more frequently attached. In response to this, the Wages Abolition Amendment Act was enacted in 1870 (WAAA, 1870) to provide that a judgment could not be enforced against the wages of any “servant, labourer or workmen”.14 The preamble of the WAAA, 1870 stated that the attachment of wages had led to

4 1 & 2 Vict c 110. 5 The actual words to the Sheriff being: “quod fieri facias de bonis et catallis …” (“you cause to be made of the goods and chattels …”). 6 Or bailiff, depending on the court. 7 Certain goods could not be attached. See, infra, n 34 and the accompanying text. 8 See Form 53 of vol 2 of any edition of the Supreme Court Practice from 1970 to 1997. 9 17 & 18 Vict c 125. 10 Section 61 of the CLPA, 1854 provided the court with the discretion to make the garnishee order. 11 Subject to certain exceptions. For the exceptions in the Singapore rules, see O 46 r 2 RC. 12 Land Company of Ireland v Fermoy (1870) LR 5 Ch 323; Hopton v Robertson (1884) WN 77; Re A Solicitor (1884) 33 WR 131. 13 The Order in Council was made on 18 November 1867. 14 WAAA, 1870, s 1. 16 SAcLJ 27 Enforcement against Judgment Debtor’s Earnings 29

“inconvenience” and that it would be “expedient” to prevent this type of enforcement. The intention of the WAAA, 1870 was to protect the “servant, labourer or workman” from being deprived of income on which he and his family depended for their subsistence. The fact that not every -earner was protected by this legislation is evident from Hall v Pritchett15 (a case decided seven years after the enactment of the WAAA, 1870), in which the Divisional Court did not consider this legislation as being pertinent to a salaried medical officer.16 This limitation of the scope of the WAAA, 1870 was strongly emphasised by Grove and Lopez JJ in Gordon v Jennings,17 in which the same court determined that the salary of a company secretary could be attached because he was not a “servant” in the sense contemplated by the Act.18

Developments in Singapore

3 The first provisions to govern the enforcement of judgments were introduced to the Straits Settlements by the Civil Procedure Ordinance, 1878 (CPO, 1878).19 Although, they incorporated certain features of the writ of fieri facias and the process for attaching debts,20 the similarity ended there. In England, the Sheriff21 had authority under the writ of fieri facias to seize anywhere in the county even if a chattel owned by the judgment debtor was in the possession of another person.22 However, he could not “seize a debt” owed to the judgment debtor. For this purpose, the judgment creditor would have to apply to the court for the appropriate order against the third person.23 In the Straits Settlements, the writ of “seizure and sale” (this more literal

15 [1877] 3 QBD 215. 16 The court did not consider the WAAA, 1870 at all in this case. 17 [1892] 9 QBD 45. 18 The judicial observations are referred to in n 44, infra. 19 Ordinance No 5 of 1878. This statute and the Civil Procedure Ordinance, 1880 (Ordinance No 8 of 1880) were based on the Schedules to the Imperial Judicature Act of 1875 (38 & 39 Vict c 77). 20 The CPO, 1878 also introduced other enforcement measures (such as the writ of sequestration) which are not within the scope of this article. 21 Or bailiff in the case of a lower court. 22 Re Davies ex parte Williams (1872) 7 Ch App 314 at 317; Re Cooper (a bankrupt) ex parte The Trustee v Registrar and High Bailiff of Peterborough and Huntingdon County Courts [1958] Ch 922. Furthermore, if property was in the possession of a person in another county, a separate writ of fieri facias could be issued to the sheriff of that country so that the property could be seized (O 47 r 2 of the former English RSC, 1965). 23 As discussed above. 30 Singapore Academy of Law Journal (2004) nomenclature was preferred to “fieri facias”24) extended to such a debt. There was no separate attachment process for debts such as the one which had been made available in England through the CLPA, 1854. If a judgment creditor wanted satisfaction by recovering a third party’s debt to the judgment debtor, he would have to utilise the process of “”.25 The Sheriff would serve a written notice on the third party (a garnishment notice)26 to the effect that he (the third party) was bound to preserve the money which represented the debt on pain of having to compensate the judgment creditor himself. In fact, the garnishment procedure was essentially the extension of the writ of seizure and sale by way of notice to a third party who had custody of or control over any property (including money owed as a debt) beneficially owned by the judgment debtor.27 Garnishment was a method of seizure by notification; it had nothing to do with the garnishee process which had been introduced by the CLPA, 1854 and which is now formulated in the Rules of Court.28 Therefore, in the Civil Procedure Code, 1907 (CPC, 1907), the garnishment process – being a method of giving effect to the writ of seizure and sale (by notice) – was included under the heading “Writs of Execution”.29

4 The CPC, 1907 established a more comprehensive framework for the enforcement process. Fundamentally, a new provision was introduced to declare the types of property which could be seized by the writ of seizure and sale. Having set out in s 617(1) a very broad range of items (including debts) as being subject to the writ, the CPC went on in s 617(2) to exclude the following property from seizure: (a) the wearing apparel and bedding of the judgment debtor or his family and the tools and implements of his trade, when the value of such apparel, bedding, tools, and implements does not exceed fifty dollars; (b) the wages and salary of the judgment debtor;

24 CPO 1878, s 407. 25 The process was referred to as “Garnishment” as indicated in the heading to s 407 of the CPO, 1878. 26 See the heading to Form 48 of the CPO, 1878, which states: “Garnishment notice”. 27 CPO 1878, s 407. This statute was amended by the CPO 1880 to include a provision (s 412) to enable the judicial examination of the garnishee as to the property over which he had possession, custody or control. 28 Ie, O 49 RC. The reasons for this development will be considered under “Garnishee process in Singapore after 1970”. 29 The heading appeared above s 617 of the CPC, 1907. The garnishment procedure was set out in s 621. 16 SAcLJ 27 Enforcement against Judgment Debtor’s Earnings 31

(c) any pension, gratuity or allowances granted by the Government; (d) the share of a judgment debtor in a partnership, as to which the judgment creditor is entitled to proceed to obtain a charge under s 23 of the Partnership Act, 1890.

5 Section 617(2) was reconstituted in subsequent statutes30 until its present formulation as s 13 of the SCJA. The procedure relating to garnishment under a writ of seizure and sale was eventually devolved from parent legislation to rules of court.31 Section 13 states that apart from certain exceptions, “all the property of whatever description of a judgment debtor may be seized”. The exceptions are: (a) the wearing apparel and bedding of the judgment debtor or his family, and the tools and implements of his trade, when the value of such apparel, bedding, tools and implements does not exceed $1,000; (b) tools of artisans, and, where the judgment debtor is an agriculturist, his implements of husbandry and such animals and seed- grain or produce as may in the opinion of the court be necessary to enable him to earn his livelihood as such; (c) the wages or salary of the judgment debtor; (d) any pension, gratuity or allowances granted by the government; and (e) the share of the judgment debtor in a partnership, as to which the judgment creditor is entitled to proceed to obtain a charge under any provision of any written law relating to partnership.

6 There are some differences between the position in 1907 and today. The amount in s 13(a) is $1,000 in contrast to the sum of $50 in s 617(2)(a) of the CPC, 1907. A new para (b) was added by the Courts

30 Section 617 was succeeded by s 13 of the Courts Ordinance, 1934; s 14 of the Courts Ordinance, 1955 and s 25 read with the First Schedule (para 9) of the Courts of Judicature Act, 1964; and finally by s 13 of the SCJA, 1970. 31 Sections 618–621 of the CPC, 1907 concerned the methods for seizing the various types of property belonging to the judgment debtor. Section 621 made provision for seizure by the Sheriff of the judgment debtor’s property (including money) in the custody or under the control of [the garnishee] “by giving a notice in writing to the garnishee”. Sections 618–621 (together with other provisions) became subsidiary legislation in the form of O 41 of the Rules of the Supreme Court, 1934 (“RSC, 1934”) which had been passed pursuant to the Courts Ordinance of 1934. Corresponding rules were established for the District Courts (“DCR, 1941”). Both the RSC, 1934 and DCR, 1941 were repealed by the RSC, 1970 which separated the garnishee process from the other modes of enforcement. This new process is considered below, under “Garnishee process in Singapore after 1970”. 32 Singapore Academy of Law Journal (2004)

Ordinance, 1934.32 Consequently, the former s 617(2)(b) of the CPC, 1907 became para (c) of s 13 of the SCJA without any change to its wording.

7 Surprisingly, there has not been any further modification of these provisions. Paragraph (a), which has remained intact (apart from the change of the maximum amount), is based on the long-established rule that execution must not deprive a person of his livelihood.33 Paragraph (b) obviously has the same objective and overlaps with para (a). However, the terminology of both paragraphs needs to be reformulated in a contemporary context.34 Paragraph (c) is fundamentally problematic. No such exception applied to the English writ of fieri facias. The Sheriff could seize actual money belonging to the judgment debtor even if it consisted of a salary which had just been paid. The position was different with regard to wages which were due and owing to the judgment debtor from his employer. From the time of the CLPA, 1854, debts consisting of wages could be attached through the garnishee process.35 The WAAA, 187036 seems to have been the genesis of s 617(2)(b) of the CPC, 1907 which now appears as s 13(c) of the SCJA.

8 Paragraph (c) gives rise to more than one interpretation. Literally applied, it excludes wages from seizure whether or not they have been paid to the judgment debtor.37 Narrowly construed, the paragraph might be limited to unpaid wages attachable by the notice of garnishment (before 1970) and the garnishee order pursuant to O 49 (after 1970),38 in which case wages in the possession of the judgment

32 This Ordinance is referred to in n 30, supra. 33 The former English statutory provisions to this effect include: Small Debts Act, 1845, s 8; Law of Distress (Amendment) Act, 1888, s 4; Administration of Justice Act, 1956, s 37, SI 1980 No 26. 34 For example, in England, s 138(3A) of the Supreme Court Act, 1981 and s 89(1) of the County Courts Act, 1984 (as amended) exclude: “(i) such tools, books, vehicles and other items of equipment as are necessary to [the debtor] for use personally by him in his , business or vocation; (ii) such clothing, bedding, furniture, household equipment and provisions as are necessary for satisfying the basic domestic needs of [the debtor] and his family.” 35 Unless the WAAA, 1870 applied. 36 Referred to above, under “Developments in England”. 37 Where they have been paid, the wages would have to be identifiable in the hands of the judgment debtor. This may be difficult if the wages have been “mixed” with other money. 38 According to High Court in American Express Bank Ltd v Abdul Manaff bin Ahmad [2003] 4 SLR 780 (discussed below, under “Garnishee process in Singapore after 16 SAcLJ 27 Enforcement against Judgment Debtor’s Earnings 33 debtor are not protected and, therefore, can be seized as “money” pursuant to s 13. If the legislators behind the CPC, 1907 had intended to follow the English position – which, pursuant to the WAAA, 1870, only protected unpaid wages from attachment39 – this protection was unwittingly extended in the Straits Settlements to the writ of seizure and sale by the subsumption of garnishment under that writ.

9 Assuming that the literal interpretation of s 13 applies in Singapore (so that wages paid to the judgment debtor are protected), the practical difficulty of determining what, if any, part of the money in the possession of a judgment debtor consists of wages has not, to the knowledge of the author, been judicially considered. It may well have been the reason why English law distinguished between a salary which was identifiable as a debt yet to be paid (and, therefore, could be easily attached) and a salary which had been paid and mixed with other moneys of the judgment debtor. If a judgment debtor in Singapore claims that money seized from him includes wages and this is disputed by the Sheriff, the former would need to apply to court for the appropriate relief. Similarly, if, as has been decided,40 s 13 of the SCJA applies to the garnishee process (governed by O 49 RC), the judgment debtor might be able to argue that his bank account cannot be the subject of a garnishee order because it consists of an accumulation of his salary.41 Where a judgment debtor makes the allegation that money in his possession consists of all or part of his salary (or salaries), he should have the burden of proving this contention.42

10 Paragraph (c) also raises the issue of its purpose. Read literally, it is a blanket prohibition on the seizure and attachment of earnings irrespective of the amount of the salary and the pecuniousity of the judgment debtor. This seems inconsistent with paras (a) and (b) which

1970”), s 13 of the SCJA does protect wages from a garnishee order granted under O 49. 39 The writ of fieri facias could always be enforced against the money of the judgment debtor including money representing his wages. 40 See American Express, supra, n 1. The case is considered below, under “Garnishee process in Singapore after 1970”. 41 Although the counter-argument would be that once wages are paid into a bank account, they lose their status as wages by becoming the property of the bank which simply owes a debt (to the extent of the amount in the bank account) to the debtor. Furthermore, it may be contended that the court in American Express contemplated the situation in which a garnishee order is sought against an employer in respect of his liability to pay wages to the judgment debtor. 42 As this would be a matter of his own knowledge and, therefore, be easier for him to prove. See s 108 of the Evidence Act (Cap 97) which expresses this principle in relation to proof at trial. 34 Singapore Academy of Law Journal (2004) are clearly intended to shield the persons who might otherwise become destitute.43 The wording of the salary exception is distinguishable from that in the WAAA, 1870 which prevented the attachment of the wages of any “servant, labourer or workmen”. The courts were clear that this statute did not apply to persons other than those of lowly means.44 There was a similar sentiment in the Straits Settlements even prior to the introduction of s 617(2)(b) of the CPC, 1907. Thus, in MPLA Peyna Carpen Chitty v Max J D’Souza,45 Wood ACJ, in the Straits Settlements Supreme Court, refused to attach the salary of a clerk “on the supposition that the wages of the clerk are his sole means of living”. The learned judge was aware that there was no legislation in the Straits Settlements corresponding to the WAAA, 1870. However, he reached his conclusion on the basis of the provisions in CPO, 1878 concerning the examination of judgment debtors and the court’s power to order the payment of the judgment sum by instalments.46

11 To summarise, if the intention of the WAAA, 1870 and judicial sentiment in the Straits Settlements prior to 1907 was to protect the

43 It might be appropriate to read s 13(c) ejusdem generis with paras (a) and (b) of this section, both of which very obviously concern the basic living and working essentials of the manual labourer or farmer. Note the monetary maximum of $50 in s 617(2)(a) of the CPC, 1907 and $1,000 in the current s 13(c) of the SCJA. Any amounts above these limits carry the assumption of insufficient poverty and would render the property liable to seizure. Furthermore, para (a) refers to the judgment debtor’s family thereby envisaging a situation in which the judgment debtor is supporting his family with his income. Paragraph (b) states categorically that the items listed (the basic equipment or materials of his work) are only protected if they are “necessary to enable him to earn his livelihood”. 44 In Gordon v Jenkins [1892] 9 QBD 45, Grove J stated: “The term ‘wages’ [applies] to ‘domestic servants, labourers and persons of a similar description’. Taking the collocation of the word ‘servant’ with ‘workman’ and ‘labourer,’ it is obvious that the reasonable application of the Act is to persons of small means – to servants, such as labourers and workmen receiving small wages at short periods.” Lopez J concurred: “It seems obvious from the terms used that the object was to except from liability … persons who would be likely to be deprived of their daily means of subsistence by having their earnings attached …”. Also see Moriarty v Regent’s Garage and Engineering Company, Limited [1921] 1 KB 423 in which this view is supported. McCardie J considered the above proposition as a basis for distinguishing between wages and salary: “… the word ‘salary’ is used for payment of services of a higher class, and ‘wages’ is confined to the earnings of labourers and artisans”. This is also the position in Australia: TW Morris & Son Pty Ltd v Commissioner of Pay-roll Tax (1992) 23 ATR 250; Mutual Acceptance Co Ltd v Federal Commissioner of Taxation (1944) 69 CLR 389 at 398. 45 (1892) SSLR 64. 46 Contained in Chap XXXIV of the Ordinance. Cf CK Peria Kurpen Chitty v A J Rodriguez (1891) Straits Law Reports(NS) 45, in which Goldney J allowed the attachment of the judgment debtor’s wages in the absence of legislation corresponding to the WAAA. 16 SAcLJ 27 Enforcement against Judgment Debtor’s Earnings 35 poorest in society from having their wages or salary attached by garnishment, this does not seem to have been the effect of s 617(2)(b) of the CPC and, now, s 13(c) of the SCJA. This provision, literally construed, extends the exception to any person who is owed his wages or salary regardless of whether he is wealthy or destitute. Such an interpretation may be irrational and contrary to considerations of justice if one believes that a person who is able to pay the amount of the judgment should not be permitted to defeat the right of the judgment creditor to what is due to him. Some of Singapore’s highest income earners draw “wages or [a] salary”. Whatever may have been the position a century ago, many people now have various sources of income including a salary and it may not longer be appropriate to accord wages or salary a special status.

12 If, however, the basis of the wages exception is not to afford protection to the poor but to exclude the attachment of earnings as a matter of principle,47 then the exclusion should apply to the salary or wage before it loses that identity by being paid to the judgment debtor. For example, if the principle is that the attachment of a salary by seizure (prior to 1970) or garnishee order (after 1970) is to be avoided because it could adversely affect the relationship between employer and employee, it only makes sense to apply the restriction while it is still a debt owed to the employee. Once paid to the judgment debtor, it becomes money pure and simple. Yet, as has been argued, s 13(c) literally applies to prohibit the seizure of money representing a salary which has already been paid to the judgment debtor.

Garnishee process in Singapore after 1970

13 The English garnishee order (which had been introduced by the CLPA, 1854) was ignored by the framers of the CPO, 1878 in favour of a broad writ of execution to cover, inter alia, the attachment of debts. The concept of garnishment as part of the mechanism of the writ of seizure and sale operated for 92 years before the Rules Committee decided to adopt the English garnishee procedure by framing O 49 of the RSC, 1970 (RSC, 1970). This relatively new process (as far as Singapore is concerned), which is now governed by O 49 RC, involves attachment by court order. An application is made to the court which may order the garnishee “to show cause”. The debt is attached from this time on but the garnishee will not be required to pay the judgment amount out of

47 The issue of whether Singapore should have a mechanism for the attachment of earnings is considered below, under “Attachment of earnings as an enforcement measure in Singapore?” 36 Singapore Academy of Law Journal (2004) this debt to the judgment creditor unless and until the order is made absolute in a further proceeding.48

14 Unfortunately, while the RSC, 1970 introduced the new garnishee procedure for enforcing a judgment against a debt owed by a third party to a judgment debtor, the SCJA consolidated the existing law on enforcement.49 Section 13 of the SCJA perpetuated the same general rule and exceptions concerning the seizure of property under a writ of seizure and sale. The provision carried the same title – “Writs of execution” – as the antecedent statutes all the way back to 1907.50 However, after 1970, s 13, literally construed, no longer applied to debts owed by a third party to the judgment debtor for the simple reason that the new garnishee order was and is not a writ of seizure, nor a writ of execution. Arguably, a judgment debtor may attach a salary pursuant to O 49 if it is due and owing. Although there is no general definition of a writ of execution in the RC, the garnishee process is not included as a writ of execution in O 46, r 1 and it certainly has no part in O 47 which is specifically concerned with writs of seizure and sale. Furthermore, O 45 distinguishes between the writ of seizure and sale and garnishee order.51 In Hongkong and Shanghai Banking Corp v Goh Su Liat (Telecommunication Authority of Singapore, garnishee),52 the assistant registrar made a garnishee order absolute against a garnishee in a respect of a salary owed to the judgment debtor. On appeal, Chua J set aside the garnishee order on the basis that the salary had not yet become due and payable as required by O 49 r 1 (RSC, 1970). It is interesting that neither the assistant registrar nor Chua J considered the applicability of s 13(c) of the SCJA to the garnishee process.53

15 The issue was directly tackled for the first time in American Express Bank Ltd v Abdul Manaff bin Ahmad,54 in which Lai Kew Chai J ruled that the SCJA was a consolidating statute and that Parliament

48 See O 49 rr 1–5 RC. 49 See main text at n 55, infra. 50 The antecedent statutes are indicated in n 30, supra. 51 See O 45 r 1(1)(a) and (b) RC. 52 [1984-1985] SLR 804; [1986] 2 MLJ 86. 53 The statute does not appear to have been raised by the judgment debtor in argument. Doubt had been expressed by the Subordinate Courts as to whether the case, in the absence of argument on the specific issue, stands for the proposition that the s 13 does not apply to enforcement by garnishee order. See American Express Bank Ltd v Abdul Manaff bin Ahmad, supra, n 1 at [68]–[73]; Standard Chartered Bank v Evergreat Construction Company Pte Ltd [2003] SGDC 233 at [34]–[40]. 54 [2003] SGHC 256. 16 SAcLJ 27 Enforcement against Judgment Debtor’s Earnings 37 intended it “to be construed in the same manner and to the same extent as the antecedent legislation”.55 Accordingly, it “did not expressly or by necessary implication confer on the judgment debtors new rights to attach salaries and wages”.56 If this is the case, then the argument that s 13 did not apply to the garnishee process by virtue of the RSC, 1970 (because it had become entirely separate from the writ of seizure and sale and, therefore, was no longer a writ of execution) is weakened by the principle that the scope of parent legislation should not be affected by a modification of its subsidiary rules (ie, the RSC, 1970).57 The learned judge also concluded that the phrase “writ of seizure and sale” in s 13 has to be read, on a purposive construction, more broadly than its specific meanings in O 45 to O 47 and that, accordingly, it encompasses the garnishee order.58 This is clearly supportable by s 13 itself which applies to all including debts and other intangibles which are subject to enforcement by methods other than the writ of seizure and sale.59 Furthermore, s 80(2)(l) of the SCJA enables the Rules Committee to make rules concerning the writ of seizure and sale. The fact that para (l) refers to the writ of seizure and sale and neither it nor any other paragraph of s 80(2) addresses other enforcement processes (such as the garnishee order and equitable receivership) is also indicative of the all-encompassing nature of this process.60 This is because, as in the case of s 13 of the SCJA, it consolidates the position prior to 1970. Although the decision in American Express might be justified on the basis of legal orthodoxy, it does present problems at a practical level.

Summary of concerns61

16 The following is a summary of the concerns:

(a) It is clear that a garnishee order is not a writ of execution. No writ is involved and there is no seizure and sale of

55 Ibid at [18]. 56 Ibid at [21]. 57 Ibid at [30]. 58 Ibid at [27]. 59 Ie, in particular, the garnishee and equitable receivership orders. (Ibid at [28].) This is also evident from paras (c)–(e). 60 Although para (l), like other the other paragraphs in s 80(2), do not limit the court’s power to make any rules of procedure concerning matters not specified in that sub-section (see the preamble to s 80(2)). 61 These are not necessarily addressed in the same order of the points made in this article. 38 Singapore Academy of Law Journal (2004)

property. Moreover, the garnishee process is an entirely different species of enforcement involving its own particular procedure. While it may be necessary to regard this enforcement process as part of the machinery of the writ of seizure and sale in the interest of preserving the integrity of s 13 of the SCJA (as it now stands) and the legislative background to this statute, such an approach is artificial and unlikely to promote precision and clarity in the enforcement process.62 It is necessary to change the pertinent provisions of the SCJA (such as s 13 and s 80) so that the garnishee order is given its proper place as an independent method of enforcement.

(b) Section 13 of the SCJA applies the writ of seizure and sale to all property including debts and other intangibles. Yet, the RC clearly limit the writ of seizure and sale to physical goods, land and securities.63 Furthermore, paras (c) to (e) of s 13 concern property which can also be the subject of other enforcement measures such as the garnishee order and equitable receivership. Accordingly, s 13 should be amended to incorporate the other enforcement measures.

(c) Section 80(2)(l), which only refers to writ of seizure and sale, should include the other enforcement measures contemplated by the RC. Although s 80(2) does not qualify the general powers of the Rules Committee to make rules to govern any procedure pursuant to s 80(1), the impression given by s 80(2)(l) is that the writ of seizure of sale is the only enforcement measure available.

(d) Paragraphs (a) and (b) of s 13 of the SCJA are antiquated provisions and should be reformulated in a modern context.64

(e) Literally interpreted, para (c) of s 13 prohibits the seizure of salary even though it has been paid over to the judgment debtor and mixed with other moneys. Therefore, it could be argued that salary accumulated in a bank account should not be the subject of a garnishee order as the court in American Express ruled that s 13 of the SCJA applies to the garnishee process. Although the bank may owe a debt to the

62 For example, O 46 consists of a myriad of rules concerning the writ of execution which are wholly alien to the garnishee process. 63 See O 45 to O 47 (considered in the main text leading to n 51, supra). 64 Supra, n 34 for the modern formulation of the English exceptions. 16 SAcLJ 27 Enforcement against Judgment Debtor’s Earnings 39

judgment debtor (by virtue of the judgment debtor’s account with it), which can be attached pursuant to O 49, the judgment debtor might contend that this would only be to the extent of non-salaried money. Such an interpretation might be refuted on the basis that the court in American Express contemplated the situation in which a garnishee order is sought against an employer in respect of his liability to pay wages to the judgment debtor. Nevertheless, some uncertainty remains.65

(f) If para (c) is intended to protect the impecunious, its present wording does not achieve this objective for it applies to every judgment debtor irrespective of the income he derives from his employment. If the paragraph is intended to protect every judgment debtor irrespective of his financial circumstances, the question arises as to whether this is fair to the judgment creditor.

(g) If para (c) is based on the principle of non-interference with the relationship of employer and employee or some other reason why wages or salary ought not to be attached, it should not apply where the salary has already been paid (for example, to the judgment debtor or into a bank account) and is no longer identifiable as salary.

(h) Is it opportune for Singapore to introduce the process for attachment of earnings as a method of enforcement against civil debtors generally?

Attachment of earnings as an enforcement measure in Singapore?

17 The viability of introducing a new enforcement measure must depend on the efficacy of existing methods of enforcement and the extent to which (if any) the additional process would improve the system as a whole. This determination must take into account the judgment creditor’s interest in gaining the fruit of his efforts in winning the suit and fairness in the method by which the judgment debtor is subjected to his liability.

18 A court order for the attachment of earnings is addressed to the employer and has the effect of requiring the employer, on pain of contempt, to remit the amount ordered to be paid to the judgment creditor (through the court) as and when the salary or other form of

65 Supra, n 41 and the accompanying main text. 40 Singapore Academy of Law Journal (2004) earnings66 is due (normally on a monthly basis). There are obvious advantages to the process of attachment of earnings. An order guarantees that the judgment creditor will obtain a certain sum every month in satisfaction of the debt. The judgment debtor is unable to interfere because he has no control over the money which is remitted by the employer directly to the judgment creditor. There is flexibility in the order in that the amount fixed would take into account the judgment debtor’s living needs.67 A regular limited deduction of income is likely to be preferred by the judgment debtor over the more invasive seizure and sale of assets which he values. It may also be the first choice of the judgment creditor where the judgment debtor has no assets or the assets seized are unlikely to generate sufficient funds in the context of his claim. The attachment order is likely to be more straightforward and inexpensive than other enforcement methods. Execution by writ of seizure and sale can be affected by delay, involve disputes over ownership, and is often cumbersome and expensive. The garnishee order depends on the existence of a debt, involves court appearances and often raises legal issues for determination resulting in additional expense. The attachment of earnings order is more flexible than the garnishee order in that the former usually continues until the judgment is satisfied,68 whereas the latter is normally linked to a single debt which may be insufficient to satisfy the judgment sum.

19 The attachment order may often be a more appropriate method for dealing with judgment debtors who have defaulted on court-directed instalment payments.69 The power to commit the judgment debtor to a “civil prison” in these circumstances is no doubt a powerful threat.70 However, it is dependent on whether the judgment debtor had the financial means to comply with the order to pay instalments.71 The difficulty of establishing the debtor’s financial means and the reluctance of the court to commit debtors to prison unless the facts show a wilful refusal to comply (in spite of having the financial means to do so)

66 Such as bonuses, pensions, overtime pay, fees, commission and other emoluments. The order could also be made against a self-employed debtor in respect of payments he receives. (See the definition of “earnings” in s 80 of the Women’s Charter (Cap 353)). 67 Ie, he would continue to receive some of the income as decided by the court to be appropriate in the circumstances. 68 Although the order may have to terminate where, for example, the judgment debtor is no longer employed. 69 In respect of proceedings in the subordinate courts. See O 47 rr 1A and 1B RC read with s 43 of the Subordinate Courts Act (Cap 321). 70 Debtors’ Act (Cap 73), s 24. 71 Ibid s 24(9). 16 SAcLJ 27 Enforcement against Judgment Debtor’s Earnings 41 suggest that imprisonment may not be the most effective enforcement method in these circumstances. Moreover, imprisonment is a negative measure which does not produce income for the judgment creditor and deprives the judgment debtor of the opportunity to be productive. An attachment of earnings order would be justified in this situation on the basis that the judgment debtor’s salary is sufficient to pay the judgment debt over a reasonable period of time72 and that the efficacy of the order does not depend on his compliance. To the extent that protection should be afforded to judgment debtors in certain circumstances, this can be effected by the appropriate statute.73

20 Attachment of earnings orders are not unprecedented in Singapore. The courts have power to make an attachment of earnings order to secure the payment of maintenance under the Women’s Charter.74 The spouse who is entitled to be maintained may have a stronger case than the ordinary creditor for such relief because of the nature of the relationship involved. As she is generally expected to receive maintenance out of the paying spouse’s salary, an attachment order would protect her from regular defaults. Furthermore, unlike the ordinary creditor, the payee spouse may have no other legal recourse against the spouse in .75 Notwithstanding these differences between the spouse who is entitled to be maintained and the case of an ordinary judgment creditor, there are, as has been explained, good reasons why the attachment order should also be available to the latter in appropriate circumstances. Indeed, in England, after some vacillation,76 the WAAA, 1870 was repealed77 and a statute for the attachment of earnings was introduced in 1971.78

72 Leaving the judgment debtor with sufficient income for his living expenses. 73 See, for example, s 24 CPF Act (Cap 36); s 10 Workmen’s Compensation Act (Cap 354); s 11 Pensions Act (Cap 225); s 26 Employment Act (Cap 91); s 60(1) Merchant Shipping Act (Cap 179). 74 Women’s Charter, ss 81–85. 75 Although the defaulting spouse may be imprisoned if he wilfully refuses to pay in spite of his ability to do so. (See Pt IX of the Women’s Charter.) The ordinary creditor can avail himself of other enforcement methods. 76 In 1953, the Committee on Supreme Court Practice and Procedure (“Evershed Committee”) decided not to recommend the introduction of the attachment of earnings. See Evershed Committee Report (Cmd 8878; July, 1953, at para 430.) 77 By the Statute Law (Repeals) Act, 1976 (c 16). 78 Ie, the Attachment of Earnings Act, 1971 (c 32).