modelpropsingapore (book)

Property and Trust Law (February 2000) Singapore – 1

2000Kluwer Law InternationalThe Hague • London • Boston


Singaporeby Prof. Sook Yee Tan

and

Hans Tjio

This text is up to date as of May 1998


The Authors

Tan Sook Yee B.A. (Mod) Trinity College Dublin,LL.B. Trinity College Dublin, Barrister Middle Templeand Advocate and Solicitor of the Supreme Court Sin-gapore, Associate Professor at the National Universityof Singapore, Faculty of Law was Dean of the Facultyof Law, National University of Singapore from 1980 to1987. She has taught Land Law and Equity and Trustsfor many years and has written extensively on thesesubjects, including two books, Principles of SingaporeLand Law and Private Ownership of Public Housing inSingapore. She is currently a member of the Strata TitlesBoard and the Tenants Compensation Board.

Hans Tjio B.A. (Hons) Cambridge, UK; LL.M. Harvard,USA, Barrister (Middle Temple) and Advocate andSolicitor of the Supreme Court Singapore, SeniorLecturer and Sub-Dean at the Faculty of Law, NationalUniversity of Singapore. He has taught at the Facultyof Law, National University of Singapore since 1990in areas such as banking, company, commercial andcontract law, and equity and trusts. He has also pub-lished in local and overseas journals, including the LawQuarterly Review and Journal of Business Law.

4 – Singapore Property and Trust Law (February 2000)

The Authors


Table of Contents

The Authors 3

Table of Contents 5

List of Abbreviations 13

General Introduction 15

§1. General Background 15I. Geography, History and Climate 15

II. Cultural Composition 16III. Political System 16

§2. Legal Background of the Country 17I. Constitutional Framework 17

II. Parliament and Legislative Process 18III. Common Law and Judicial Process 19IV. Executive Powers and Administrative Law 20

§3. Introduction to the Law of Property and Trust 21I. Historical Origins and Evolution 21

II. Concept of Ownership 23A. Unity and Fragmentation 23B. Immovable and Real Property 25C. Movable and Personal Property 26

III. Trust and Fiduciary Mechanisms 27A. Trusts and Equitable Interests 27B. Fiduciaries 28

IV. Possession and Title 29

Selected Bibliography 31

Part I. Immovable Property and Real Property 33

Chapter 1. General Classification 33

§1. Classification 33§2. Land and Fixtures 34


Table of Contents

§3. State Lands 34I. State Lands and State Leases 34

II. Grants in Fee Simple 35III. Reversion to State 35

Chapter 2. Legal and Equitable Interests 37

Chapter 3. Registration Systems 40

§1. Registration of Deeds 40I. In General 40

II. Reasons for Registration 40A. Admissibility as Evidence of Title 40B. Priority 41

III. Problems 42§2. Land Titles Act 42

I. Bringing Land under the Land Titles Act 42II. Qualified Titles 43

III. Effect of Registration 43IV. Indefeasible Title 44

A. Assurance Fund 44B. Overriding Interests 44C. Exceptions 44

V. Unregistered Interests and Caveats 45

Chapter 4. Limited Interests 47

§1. Leases 47I. Kinds of Leases 47

A. Fixed Term Lease 47B. Periodic Lease 48C. Tenancy by Estoppel 48D. Reversionary Lease 48

II. Requirements for Validity 49A. Exclusive Possession 49B. Certainty of Duration 49C. Formalities 50

III. Assignment and Sublease 50A. Assignment 50B. Sublease 51

IV. Determination of Leases 51A. Expiration of Term 51B. Notice to Quit 52C. Surrender 52D. Merger 52E. Frustration 53F. Forfeiture 53


V. Rights of Landlord and Tenant 53A. Implied Terms 53

1. By the Landlord 532. By the Tenant 54

B. Usual Covenants 54C. Other Commonly Expressed Covenants 54

VI. Remedies for Breach of Covenant 55A. Damages 55B. Forfeiture 55C. Distress 55

VII. Covenants and Successors in Title 56§2. Licences 56

I. Nature and Types of Licences 56II. Distinction Between a Licence and a Lease 57

III. Rights of Licensees 58A. Gratuitous Licence 58B. License Coupled with a Grant 58C. Contractual Licence 58D. Licence Coupled with an Equity 58

§3. Easements 59I. Easement Distinguished from Other Rights 59

II. Characteristics of an Easement 60III. Under General Law 61

A. Acquisition of Easements 61B. Extinguishment of Easements 62

IV. Under the Land Titles Act 62A. Acquisition of Easements 62B. Extinguishment of Easements 63

V. Profits a Prendre 64§4. Restrictive Covenants 64

I. At General Law 64A. Running of the Burden 64B. Annexation of the Benefit 65C. Discharge of Restrictive Covenants 66

II. Under the Land Titles Act 66A. Running of Burden 66B. Annexation of Benefit 67C. Discharge 67

III. Remedies for Breach of Restrictive Covenant 67

Chapter 5. Security Interests 68

Table of Contents


Chapter 6. Joint Ownership 70

§1. Joint Ownership of Immovable Property 70I. In General 70

A. Joint Tenancy 70B. Tenancy in Common 71C. Termination of Co-ownership 72

II. Co-ownership Applied to Apartment Buildings 73A. In General 73B. Strata Title Plan 74C. Management Corporation 75D. Maintenance and Sinking Funds 76E. Meetings 76F. Rights and Liabilities of Management Corporation Re

Common Property 76G. By-laws 77H. Rights and Obligations of Subsidiary Proprietors 78I. Termination of the Strata Title Plan 79

§2. Joint Ownership of Movable Property 80

Chapter 7. Persons Who May Own Interests in Land 81

§1. General 81I. Infants 81

II. Mentally Disordered Persons 81III. Societies 81IV. Partnerships 82V. Married Women 82

§2. Under the Residential Property Act 82

Chapter 8. Planning and Development 85

§1. Under the Planning Act 85§2. Land Acquisition 86§3. De-control of Rent Control Premises 86§4. Statutory Authorities Involved in Development 87

I. Urban Redevelopment Authority 87II. Housing and Development Board 87

III. Jurong Town Corporation 87IV. The Preservation of Monument Board 88

Chapter 9. Public Housing 89

§1. Housing and Development Board 89I. General 89

II. Home Ownership Policy 89A. Eligibility 90B. Rights and Obligations of Owners 91

III. Management of Common Property 91

Table of Contents


§2. Middle Income Public Housing 92I. Housing and Urban Development Corporation 92

II. Executive Condominium Housing Scheme 93

Part II. Movable Property and Personal Property/Chattels 95

Chapter 1. General Classification 95

§1. Tangible Movable Property and Choses in Possession 95§2. Intangible Movable Property and Choses in Action 95

I. General 95II. Documentary Intangibles 96

§3. Funds 97I. Money 97

II. Mixed Funds or Assets 98§4. Chattels Real 98

Chapter 2. Legal Interests 100

§1. Ownership and Possession 100§2. Sanctity of Legal Interests 100§3. Special Property 101§4. Bailment 101§5. Co-ownership 102

Chapter 3. Equitable Interests 103

Chapter 4. Security Interests 104

Part III. Acquisition of Property Rights 105

Chapter 1. Transfer of Property by Contract INTER VIVOS 105

§1. Importance of Ownership 105§2. Land 105

I. Sale by Non-developers 105II. Sale of Units by Developers in Developments for Residential

and Commercial Purposes 107A. Residential Developments 107B. Commercial Developments 108

§3. Tangible Property: Chattels 109I. General 109

II. Specific Goods 109III. Unascertained Goods 110

Table of Contents


Chapter 2. Transfer of Property by Death 111

§1. Law Applicable to Adherents of the Muslim Faith 111§2. In General 111

I. By Will 111II. Intestate Succession 111

III. By Nomination 112IV. Right of Survivorship 112V. Donatio Mortis Causa 112

§3. Personal Representatives 113I. Executors 113

II. Administrators 113III. Estate Duty 114

Chapter 3. Possession 115

§1. General 115§2. Constructive Possession 115§3. Finding 116

Chapter 4. Gifts 117

§1. General 117§2. Delivery 117

Chapter 5. Accession 118

§1. Land 118§2. Chattels 118

Chapter 6. Expropriation 119

§1. Compulsory Acquisition of Land 119I. Purposes for Acquisition 119

II. Compensation 119III. Appeal 120IV. Vesting of Title in State 120

§2. Other Forms of Expropriation 120

Chapter 7. Insolvency 122

Part IV. Trust and Fiduciary Mechanism 123

Chapter 1. Administration of Property/Trusts 123

§1. General 123§2. Resulting Trust 124

Table of Contents


§3. Express Trusts 124I. Certainty 125

II. Discretionary Trusts 125III. Constitution 126

Chapter 2. Trusts Arising by Operation of Law 127

§1. Constructive Trust 127I. Prevention of Fraud or Unconscionable Conduct 127

II. Breach of Fiduciary Duty 128III. Constructive Trusteeship 129

Part V. Security 131

Chapter 1. Securities in Immovable Property 131

§1. Liens and Charges 131I. Under General Law 131

II. Under the Land Titles Act 132§2. Mortgages 132

I. Under General Law 132A. Formalities 132B. Equity of Redemption 133C. Mortgagee’s Remedies 133D. Discharge of Mortgages 134

II. Under the Land Titles Act 134III. Priority of Mortgages and Charges 135

A. Under General Law 135B. Under the Land Titles Act 135

IV. Transfers of Mortgages and Sub-mortgages 135V. Reverse Mortgages 135

Chapter 2. Securities in Movable Property 136

§1. General 136I. Rationale for Security 136

II. Types of Security 136§2. Charges 137

I. General 137II. Charge over One’s Own Indebtedness 138

III. Registration and the Perfection of Security 139A. Individuals 139B. Companies 140

IV. Floating Charge 140A. Conceptual Basis 140B. Characteristics 141

Table of Contents


C. Fixed or Floating? 141D. Priority of the Floating Charge 142

V. Negative Pledge 143§3. Pledge 143

I. General 143II. Creation of a Valid Pledge 144

III. Usual Settings for Pledges 145IV. Attornment 145V. Registration 146

VI. Continuance of Pledge 146VII. Trust Receipts and Letters of Hypothecation 146

§4. Quasi-security 147I. General 147

II. Retention of Title 147III. Direct Payments 148IV. Flawed Asset and Netting (Set-off ) Arrangements 148V. Quistclose Trust 149

§5. Assignments of Choses in Action 149I. General 149

II. Statutory Assignments 150III. Assignment in Equity 151IV. Unassignable Choses in Action 153V. Subject to Equities 153

VI. Priorities 154

Index 155

Table of Contents


List of Abbreviations

AC Appeal CasesAll ER All England Law ReportsCap. Chapter in the Singapore StatutesCLR Commonwealth Law ReportsCh/Ch D Reports of the Chancery DivisionConv. ConveyancerDLR Dominion Law ReportsER English ReportsFMSLR Federated Malay States Law ReportsKB Reports of the King’s Bench DivisionKy. Kyshe ReportsLQR Law Quarterly ReviewMLJ Malayan Law JournalMal. LR Malayan Law ReviewModern LR Modern Law ReviewQB/QBD Reports of the Queen’s Bench DivisionSAc.LJ Singapore Academy of Law JournalSJICL Singapore Journal of International and Comparative LawSJLS Singapore Journal of Legal StudiesSLR Singapore Law ReportsSSLR Straits Settlements Law ReportsWLR Weekly Law Reports


List of Abbreviations


General Introduction

§1. General Background1

I. Geography, History and Climate

1. Singapore is a tiny Southeast Asian city-state of only 648 km2, with a totalpopulation of about 3 million citizens and permanent residents, giving an averagepopulation density of 4,630 inhabitants per km2 living in a 100 per cent urbanenvironment. The country consists of one main island and about 60 other muchsmaller ones. Most of the population lives on the main island of Singapore whichlies at the southern end of the Malay Peninsula, at the very southern-most point ofthe European-Asian continent. To the south lies its giant neighbour Indonesia, andto its north is Malaysia, with which country Singapore shares a great part of itshistory. Inhabited possibly as early as the 3rd century, Singapore acquired its presentname (which means ‘Lion City’) by the end of the 14th century. In 1819, the Britishclaimed possession of Singapore as a colonial trading post.

1. This section and the one that follows immediately is an amended version reproduced fromMedical Law by Terry Kaan International Encyclopaedia of Laws (Singapore).

2. Except for the Japanese Occupation of the city from 1942 to 1945, Singa-pore remained under British rule until self-government was granted by the Britishin 1959. Four years later, the British relinquished all remaining claims to Singaporewhen it voluntarily entered into a federal union with the states of the then Federa-tion of Malaya, and two other British territories in Borneo to form the new Fed-eration of Malaysia. This merger with Malaysia was, however, to last for only twoyears. As a result of unresolved political tensions, Malaysia and Singapore decidedto go their own separate ways, and Singapore became an independent sovereignrepublic on 9 August 1965. A month later, Singapore was admitted to the UnitedNations as a Member State in its own right. This constitutional devolution fromMalaysia was achieved peacefully, and with the agreement of the Malaysian federalgovernment, with which it retains close and cordial relations, both bilaterally andin the context of the regional grouping, the Association of South East Asian Nations(ASEAN).

3. Situated only about 137 km from the equator, Singapore is in the equatorialrain forest climatic zone, and enjoys constant tropical climate conditions the year

1–3


round, with high levels of rainfall (2,300 mm annually) and average daily temperaturevarying little from 26˚C: the daily variation between 24˚C and 31˚C is greater thanthe annual variation.

II. Cultural Composition

4. Singapore is an atypical Asian country on many counts: its tiny size, itspopulation density, its wholly urban environment, its high level of economic andsocial development, but most of all, the diversity of its peoples, races, cultures andreligions. The great majority of its inhabitants are descendants of immigrants fromother Asian lands who came to Singapore during British colonial rule. The resultis a country which is ethnically and culturally very diverse. About 77 per cent ofthe population is of Chinese descent, 14 per cent of Malay or Indonesian descent,7 per cent of Indian descent and the remaining 2 per cent of other ethnic groups.Most of the ethnic groups in Singapore retain to a large degree their culturalheritage (including their native languages), helped by the government policy ofencouraging Singaporeans to retain their cultural roots and languages.

5. The country has four national languages: Mandarin (Chinese), Malay, Tamiland English. The language of law, government and public life is English. Theliteracy rate for men is about 96 per cent, and about 87 per cent for women. Allschool children receive their education primarily in English, but are also requiredto study their mother tongue under the long-standing government policy of bilin-gualism. Given the degree of cultural and ethnic diversity, it is not surprising thatthere is also a high degree of diversity in the religions practised by its inhabitants:more than half (54 per cent) of Singaporeans subscribe to either Buddhism orTaoism (or both), 15 per cent are of the Islamic faith, 13 per cent are Christians,3 per cent are Hindus, with about 0.5 per cent being adherents of other faiths suchas Judaism. A significant proportion of the population (14.5 per cent) profess tohaving no religion at all. This diversity of the population is significant from theperspective of the formulation of many policies and laws, as laws have to accom-modate the beliefs and values of diverse cultures and religions.

III. Political System

6. In common with many members of the British Commonwealth of Nations(now simply the ‘Commonwealth’) which achieved independence from Britainbetween the 1950s to the 1970s, Singapore inherited a written Constitution of the‘Westminster’ model, which establishes the structure of government and legalauthority, and of the organs of state. It provides for the division of the organs ofstate into the President and Parliament, the Executive and the Judiciary. This writ-ten Constitution is the ‘supreme law of the Republic of Singapore’, and furtherprovides that any inconsistent law enacted by the legislature after the coming intoforce of the Constitution should be void to the extent of the inconsistency.

4–6 General Introduction, General Background


7. In general, the constitutional framework ordained by the Constitution bearsmany points of resemblance to its unwritten British model, with a democraticsystem of government centred about the free election through universal adult suf-frage of members to an unicameral Parliament which is the sole legislature. Follow-ing a constitutional amendment in 1991, the office of the elected President (who isthe Head of State) was introduced, so that Singapore citizens now vote for theirmembers of Parliament and for the President in separate elections.

8. The assent of the elected President is required for the passage of certainmeasures by Parliament, but otherwise the legislative powers and functions of thestate is largely in the hands of Parliament. As in the British model, the Executivebranch comprises the Prime Minister and his Cabinet. By the terms of the Consti-tution, the President is to appoint as Prime Minister a Member of Parliament ‘whoin his judgement is likely to command the confidence of the majority of the Mem-bers of Parliament’. The members of the Prime Minister’s Cabinet are then ap-pointed by the President acting in accordance with the advice of the Prime Minister.

9. The life of each Parliament is for a maximum of five years, after which freshgeneral elections must be held to elect a new Parliament. Since independence, thePeople’s Action Party have been re-elected to power in every general election. Thefirst (and current) elected President, Mr. Ong Teng Cheong, was elected in 1993.Under the Constitution, all judicial power is vested in the Supreme Court and insuch subordinate courts as may be provided by law.

§2. Legal Background of the Country

I. Constitutional Framework

10. The legal background of Singapore is unusually complex because of Singa-pore’s somewhat complex legal history during the colonial era. At various times,it has been governed from the Colonial Office in British India, and has been a partof the Straits Settlements (which linked various British possessions along the Straitsof Malacca), Japanese occupied territory, British Military Administration territory,a British Crown Colony, a self-governing British dependency, a component state ofthe Federation of Malaysia, and finally a sovereign and independent republic. TheConstitution itself is derived from the old pre-independence State constitution, theFederal Constitution of Malaysia and other constitutional documents, and was notissued in its current single-document form until 1979.

11. Except for the Japanese Occupation during World War II, every phase ofSingapore’s legal history has left its mark on the country’s legal inheritance andcontributed to its sources of laws. The Constitution recognizes as valid laws notonly those laws enacted by the Singapore Parliament, but also ‘any legislation ofthe United Kingdom or other enactment or instrument whatsoever which is in opera-tion in Singapore and the common law in so far as it is in operation in Singaporeand any custom or usage having the force of law in Singapore’. Consequently,

Legal Background of the Country, General Introduction 7–11


unlike in civil law countries, the source of law is not restricted primarily to the actsof the national legislature but encompasses a wide range of other sources of law,which are now discussed below.

II. Parliament and Legislative Process

12. Currently, the primary body of written law in Singapore comprises the Actsof Parliament and the enactments, instruments, ordinances or other written lawwhich were part of the formal body of colonial laws at the time of independence.All federal laws of the Federation of Malaysia which were in force at the time ofSingapore’s separation from Malaysia in 1965 continue to apply, unless of courserepealed.

13. Most regulatory Acts and other written laws vest the relevant Minister incharge with the power to make rules relating to the objects of the Act or otherwritten law in question without the rules having to be approved directly by Parlia-ment. Although these rules (known as subsidiary legislation) are formulated andlaid down by the Executive branch of the government, they nonetheless have thestatus of written law under the Constitution as they are issued under the generalauthority of Parliament in the governing Act or other written law. These rules mayalso be changed or revoked without the consent of Parliament.

14. A large number of the current Acts of Parliament are statutory instruments(enactments, ordinances, instruments and the like) which were enacted by the co-lonial government before independence, and these continue in force as law unlessthey are repealed by Parliament. Few of them have been. One hallmark of theconstitutional and legal system in Singapore has been its remarkable pragmatism,continuity and stability – Singapore has in its current body of written law statutoryinstruments from every phase of its history except the Proclamations and Decreesissued by the Japanese Occupation Forces during World War II.

15. Apart from written laws made in or for Singapore, the Constitution alsorefers to ‘legislation of the United Kingdom . . . which is in operation in Singapore’as also forming part of the body of the written law of Singapore. Prior to 1993,there was some difficulty in determining exactly what British legislation was cov-ered under this provision. Firstly, English law statutes in force in England as at1826 became part of the law of Singapore by virtue of the Second Charter ofJustice which was issued in that year. In consequence, Singapore today retainssome statutory provisions which have long since vanished in England. Secondly, byvirtue of the Civil Law Act in its pre-1993 amendment form, it was provided thatEnglish law statutes relating to certain specified areas of law (notably banking,commercial and mercantile law) should have application to Singapore. The lawswhich were to be applicable were not specified by name, resulting in some un-certainty as to whether a given English statute applied in Singapore or not. In1993, matters were considerably cleared up by the enactment of the Application ofEnglish Law Act 1993, which specified the English statutes having application in

12–15 General Introduction, Legal Background of the Country


Singapore, as well as the necessary consequential amendments for their adoption tothe local context.1

1. Cap. 7A 1994 Rev Ed.

16. Since the enactment of the Application of English Law Act in 1993 hardlyany English statutes are applicable. Nonetheless, the continued (and continuing)reception of English law has had a significance influence on the shape of thedevelopment of the common law, which continues to be a primary source of prop-erty law in Singapore.

III. Common Law and Judicial Process

17. Like most other member nations of the Commonwealth, Singapore has acommon law legal system like its English parent and model. By this is meant thatthe courts not only apply written laws in deciding a case, but also the huge bodyof judicial precedents (previous decisions by courts in Singapore, England andother applicable jurisdictions) that constitute the body of the common law. In thecommon law tradition, legislation enacted by Parliament only provide for a generalframework: the constitutional assumption is that it is for the courts to flesh out thisgeneral framework into a more detailed one with each precedent that they set andadd to the body of the common law.

18. Some very important and large areas of Singapore law lie almost entirelyin the realm of common law, in that there is little or almost no governing legisla-tion. Instead, the common law is the only law in such areas – examples of suchareas of law include the entire fields of contract law and tort law. Traditionally, inthe absence of a local precedent on a given point of common law, the Singaporecourts have looked to English common law: this approach had its basis not only injudicial custom, but also as a result of express provisions under the pre-1993 CivilLaw Act and also by virtue of the 1826 Second Charter of Justice, both of whicheffectively provided that English common law was to be applied in Singapore asit was in England at the relevant time.

19. The position may now be different with the passage in 1993 of the Appli-cation of English Law Act, which has a consolidating effect on the application andreception of English law in Singapore. Firstly, the Act provides (in Section 3(1) )that the ‘common law of England . . . so far as it was part of the law of Singaporeimmediately before 12th November 1993, shall continue to be part of the law ofSingapore’. However, the Act goes on (in Section 3(2) ) to specify that after thatdate, English common law shall continue to be in force in Singapore ‘so far as itis applicable to the circumstances of Singapore and its inhabitants and subject tosuch modifications as those circumstances may require’.

20. The net result of these provisions is that the Singapore courts are nowexpressly authorized to reject English common law precedents if they think that the

Legal Background of the Country, General Introduction 16–20


English doctrines would be inappropriate for Singapore. In recent years, the Sin-gapore courts have signalled a willingness to consider Canadian or Australianprecedents instead of English ones. A recent significant example in the field of tortoccurred when the highest court in Singapore, the Court of Appeal, expresslydeclined to follow English approach to the awarding of damages for defects inproperty causing pure economic loss in the case of RSP Architects Planners &Engineers v. Ocean Front Pte. Ltd. [1996] 1 SLR 113. Instead, the court drew onprecedents established in Australia, New Zealand and Canada for its decision.

21. Under Article 93 of the Constitution, all judicial power in Singapore isvested in the Supreme Court and in such subordinate courts as may be provided forby law. There are basically two levels to the national court system. At the higherlevel is the Supreme Court, which consists of the High Court, and the Court ofAppeal. The High Court has original jurisdiction (it is a court of first instance) aswell as appellate jurisdiction (it hears appeals from the Subordinate Courts) in bothcivil and criminal matters. The Court of Appeal hears appeals in both civil andcriminal matters from the High Court, and is the highest court of appeal in thecountry. The High Court and the Court of Appeal have unlimited competence andjurisdiction. The High Court also exercises general supervisory and revisionaryjurisdiction and powers over the Subordinate Courts.

22. The Subordinate Courts consists of the District Courts, Magistrate Courts,Juvenile Courts, Coroners’ Courts and Small Claims Tribunals. In civil matters, theDistrict Courts are limited to hearing claims for sums not exceeding S$100,000(about US$65,000), and the Magistrate Courts to claims not exceeding S$30,000(about US$19,500), unless the parties to the action agree otherwise. Until recently,the highest court of appeal for civil matters was the Privy Council in England – thisroute of appeal was repealed by the Judicial Committee (Repeal) Act 1994, leavingthe Singapore Court of Appeal as the final court of appeal in Singapore.

IV. Executive Powers and Administrative Law

23. In the Westminster constitutional model, the Executive power of the statelies in the hands of the Prime Minister and his Cabinet. Ministers of the Cabinetare given charge of various ministries whose jurisdiction is delimited not by thelegislation but by the Executive. The role of the Executive branch in the day-to-dayregulation and supervision in Singapore is significantly enhanced by the legislativepractice of generally including in each Act of Parliament an empowering clausegiving the relevant Minister the power to make rules and regulations for the achieve-ment of the objects of the Act of Parliament in question.

24. These powers to frame rules and regulations are generally granted in broadterms, and the rules and regulations are known as subsidiary regulations and havethe same force of law as the parent Act (known as the primary legislation). Theenabling Acts generally provide for the subsidiary legislation to take effect simplyby being gazetted or published in the required statutory form by the Minister. Such

21–24 General Introduction, Legal Background of the Country


subsidiary legislation generally flesh out the regulatory framework or machinerybroadly spelt out in the parent Acts.

§3. Introduction to the Law of Property and Trust1

I. Historical Origins and Evolution

25. Singapore having been a colony of Great Britain from 1824 to 1959 is acommon law country. The reception of English law is attributed to the LettersPatent issued on 27 November 1826 more commonly known as the Second Charterof Justice 1826. This established a system of courts in the then Straits Settlementsof Penang, Singapore and Malacca with jurisdiction to hear and determine civil andcriminal cases similar to that possessed by the English courts and to ‘give and passjudgement according to justice and right’ in civil cases. This has been interpreted2

to mean that the law of England (common law and statutes) and equity as theystood on 27 November 1826 were part of the law of Singapore. The English lawthat was received was subject to modification by local legislation and custom.3 Thereception of pre-1826 English law accounts for the land law in Singapore beingbased on the doctrines of estate and tenure.

1. For a fuller account of the reception of English law into Singapore see H. Chan, The LegalSystem of Singapore, 1995; G.W. Bartholomew, Introduction in Tables of the Written law of theRepublic of: 1819–1971 Volume 1-Local Legislation Singapore. E. Srinivasagam (ed.) Lawlibrary University of Singapore, 1972.

2. Regina v. Willans (1858) 3 Ky. 16.3. Yeap Cheng Neo and Ong Cheng Neo (1875) LR 6 PC 381.

26. Although it was established that the Second Charter of Justice only broughtin pre-1826 English common law, statutes and equity nevertheless in practice post-1826 English statutes continued to be applied in commercial matters because thelocal judges and lawyers were English trained. This was regularized by Section 6Civil Law Ordinance 1878 which became Section 5 Civil Law Act.1 This provisiondirected the courts to apply the current English law in all mercantile issues unlessthere was local legislation on the matter. The section expressly excluded the appli-cation of English law relating to the tenure or conveyance or succession to anyimmovable property or any estate or interest therein. In addition to Section 5 Civillaw Act sections incorporating current English law appeared in certain local statutes,e.g., Section 101(2) Bills of Exchange Act.2 Thus while in regard to commerciallaw which concerns personal property post-1826 English statutes were partof Singapore law, in regard to land this was not the case. No post-1826 Englishstatute relating to land applied in Singapore. This was the position until the enact-ment of the Application of English Law Act in 1993.

1. Cap. 43 1988 Rev Ed. before the enactment of the Application of English law Act 1993.2. Cap. 23 1985 Rev Ed.

27. The Application of English Law Act removed the uncertainty surroundingthe question as to what English statute was still applicable. This was a particularly

Introduction to the Law, General Introduction 25–27


vexing issue in regard to commercial law.1 In land law the irritation was having oldarchaic English statutes as part of the law when in England the statutory provisionshad been modernized.2 The Application of English Law Act addressed these prob-lems by:

(i) repealing Section 5 Civil Law Act and stating clearly that no English statutewas applicable except as provided in the Act itself,

(ii) providing for the continued reception of English common law and equity asit stood on 12 November 1993,

(iii) providing a list of English statutes that still form part of Singapore law,3

(iv) stating the extent of their applicability and(v) incorporating modernized versions of old English statutes that were applica-

ble into existing local statutes.4

But although the Application of English Law Act has ended the automatic receptionof English commercial statutes yet Singapore commercial law is very much basedon English law since many of the local legislation are drawn from their Englishcounterparts and in any event some of the English statutes formed part of Singaporelaw under the Application of English Law Act itself until they were re-enacted,5

with some modifications, as local legislation. These factors combined with thecontinued reception of English common law and equity have the consequence thatin commercial matters Singapore law generally reflects English law.

1. Much has been written on this subject e.g. G.W. Bartholomew, ‘The Singapore Statute Book’(1984) 26 Mal LR 1, Chan Sek Keong, ‘The Civil Law Ordinance Section 5(1): A Re-appraisal’[1961] MLJ lvii; Soon and Phang, ‘Reception of English Commercial Law in Singapore – ACentury of Uncertainty’ in The Common Law in Singapore and Malaysia, ed. Harding at pp.34–70; Phang, ‘Thereotocal Conundrums and Practical Solutions in Singapore Commercial Law:A Review and Application of Section 5 of the Civil Law Act (1988) 17 Anglo-Am L R 251.

2. E.g. the provisions of the Statute of Frauds were incorporated into the Law of Property Act 1925England which was not applicable in Singapore.

3. These concern commercial law, e.g. Unfair Contract Terms Act 1977, Misrepresentation Act1967, Sale of Goods Act 1979, Partnership Act 1890, Carriage of Goods by Sea Act 1992. Someof these have been re-enacted as Singapore Acts, e.g. Sale of Goods Act Cap. 393 1994 RevEd., Partnership Act Cap. 391 1994 Rev Ed.

4. Section 6bB Civil law Act Cap. 43 1994 Rev Ed. replaces Sections 7, 8, and 9 Statute of Frauds1677.

5. E.g. Partnership Act Singapore Statutes Cap. 391 1994 Rev Ed., Unfair Contract Terms ActCap. 396 1994 Rev Ed., Misrepresentation Act Singapore Statutes Cap. 390 1994 Rev Ed., Saleof Goods Act Cap. 393 1994 Rev Ed.

28. The continuous reception of English principles of equity from 1826 causedthe whole body of trusts law and equitable remedies to be part of Singapore law.However as apart from commercial law English legislation enacted after 1826 didnot apply, English statutes such as the Trustees Act 1925 and the Trustees Invest-ments Act 1961, Charities Act 1960 are not applicable in Singapore. There are localstatutes which in the main follow the English counterparts covering these topics.1

1. Trustees Act Cap. 337 Rev Ed., Charities Act Cap. 37 1985 Rev Ed.

29. Thus in regard to both immovable and movable property English law andequity form the basis of the law in Singapore. Generally the local statutes follow

28–29 General Introduction, Introduction to the Law


counterparts in England, e.g., the Sale of Goods Act1 and the Conveyancing andLaw of Property Act.2 There is however one main exception in regard to land.Instead of following the English system of land registration, Singapore adopted theTorrens system which originated in New South Wales Australia. This is the LandTitles Act3 and its sister Act the Land Titles (Strata) Act.4 On this account case lawfrom other jurisdictions which also have the Torrens system of land registration areof persuasive authority.

1. Cap. 393 1994 Rev Ed.2. Cap. 61 1994 Rev Ed.3. Cap. 157 1994 Rev Ed.4. Cap. 158 1988 Rev Ed.

30. To sum up, the law in Singapore with regard to land and personal propertyis based on English common law and equity. Certain English statutes were part ofthe law of Singapore and after the enactment of the Application of English Law Actin 1993 those English statutes which are listed in the Second Schedule of the Actremain on our statute book, others have been incorporated into relevant local statutes.

II. Concept of Ownership

A. Unity and Fragmentation

31. Ownership is the term for rights which the law recognizes in the personwho is called the owner of the object. The law protects the rights of the owner ofthe object, e.g., a car in regard to his rights of possession and exclusive user. Thecontent of rights that make up ownership varies with whether the object owned ismovable property or land. In regard to chattels there is absolute ownership.

32. In regard to land the object of rights is not directly the land itself but asestate in the land. This is feudal concept which is at the very root of land law. Anindividual owns an estate in fee simple, or an estate in perpetuity or a leasehold.The law protects with its trespassory rules the rights of the owner of these differentperiods of time in the land. All land belongs to the State which alienates parcelsto individuals either in perpetuity under the State lands Act or by way of leasesunder the State Lands Act. Fee simple estates which were granted before 1902 stillremain.1

1. See below Part I Chapter 1 General Classification.

33. Thus there are three types of estates in land in Singapore, viz., the fee simpleestate, the estate in perpetuity and the leasehold. The rights of the owners of theseestates vary. For example, the fee simple estate is not affected by the conditions andcovenants set out in the State Lands Act1 as are the estate in perpetuity and theState lease. Nevertheless the owners of all these types of estates would have rightsof (i) exclusive possession, (ii) transfer inter vivos and (iii) transmissibility ondeath. The content of ownership rights also depends on whether the property are



leaseholds of Housing and Development property2 or come under the specialschemes.3

1. Cap. 314 1985 Rev Ed.2. Housing and Development Act Cap. 129 1997 Rev Ed. and see below Part I Chapter 8 Public

Housing.3. Executive Condominium Housing Scheme Act 10 of 1996. See below Part I Chapter 8 Public

Housing.

34. Because of the doctrine of estates in land, interests in land may be alienatedas interests in possession or as future interests. Thus assuming that A has a feesimple interest in Blackacre, A may grant a life interest to B with remainder to Cabsolutely. In law, the fee simple being the largest estate in land lesser estates suchas the life estate may be carved out of it.

35. The divisibility of ownership of property into present and future ownershipdepends on the nature of the property, i.e., real or personal and on whether thecontext is common law or equity. At common law the concept of estates is notapplicable to personalty (which would include the leasehold), hence at law nofuture interests can be created out of personalty. But in Equity, using the trust,future interests may be created in all forms of property. Thus in Singapore with thedoubt as to whether real property exists and with the prevalence of grants inperpetuity and leases, future interests in immovable as well as movable property arecreated under trusts.1

1. See above.

36. The restriction on the capability to create future interests lies in the ruleagainst perpetuities which was held to be part of the law in Singapore in ChoaChoon Neo v. Spottiswode.1 Thus in regard to the vesting of an interest in anyproperty the rule requires that the interest must vest if it vests at all within theperpetuity period of a life or lives in being plus 21 years and a period of gestationif any.2 The rule against perpetuities has two other aspects, viz., the rule againstperpetual trusts and the rule against accumulations. All three aspects of the rule usethe same measurement for the perpetuity period. The rule against perpetual trustsrequires that all trusts must not last for a period longer than the perpetuity period.Thus a trust of an estate in perpetuity in Blackacre to be used for the worship ofmy ancestors will be bad unless it is restricted to the perpetuity period. Similarlywhere a settlor has instructed his trustees to accumulate income from capital andto pay the accumulated income and capital to beneficiaries the accumulation mustnot exceed the permitted period. While the rule against perpetuities has been re-tained in England as in most of the common law countries, it has been modernizedand placed in legislative form with some of the anomalies removed.3 However inSingapore there has been no modernization of the rule by statute except for thecompanion rule against accumulations.4

1. (1868) 1 Ky 216, affirmed by the Privy Council in Ong Cheng Neo v. Yap Cheng Neo (1872)1 Ky 326.

2. Cadell v. Palmer (1833) 1 Cl & Fin 372.



3. E.g. the Perpetuities and Accumulations Act 1964 in England which inter alia allows for analternative fixed period of 80 years and for the wait and see approach to vesting.

4. Section 69A Conveyancing and Law of Property Act Cap. 61 1994 Rev Ed.

B. Immovable and Real Property

37. The traditional common law classification of property is real and personal.By the Second Charter of Justice 1826 the doctrine of estates in land, the divisionof property into real and personal, were received into Singapore. Thus as statedabove, ownership of land is more accurately described as ownership of estates inland. While estates in fee simple historically form part of realty, because of a quirkof English legal history leasehold interests in land are personal property rather thanreal property.1

1. See above Historical Origins and Evolution.

38. However Section 35(1) Conveyancing and Law of Property Act1 whichdeems all land as chattels real for the purposes of devolution to the personalrepresentatives and which replaces heirs with personal representatives, altered thedevolution of real property on the death of the person. Henceforth all property realor personal devolved on the personal representatives of the deceased and wereultimately distributed by the personal representatives either according to the will ofthe deceased or according to the laws of intestate succession. At this point thepractice developed of interests in land being treated similarly as personal propertyand accordingly were given to the next of kin of the deceased rather than the heir.This practice was upheld by the courts2 and eventually in 1970 the Intestate Suc-cession Act, endorsed decades of practice.3 Thus the concept of heirs was relegatedto history. The fundamental differences between real and personal property are thusobliterated.

1. Cap. 61 1994 Rev Ed. This provision superseded Section 1 Indian Act 20 of 1837.2. Syed Ali bin M Alsagoff v. Syed Omar bin M Alsagoff (1918) SSLR 103.3. Sections 5 & 7 Intestate Succession Act Cap. 146 1985 Rev Ed. repealed the Statutes of

Distribution and set out the classes of persons who are entitled to the estate movable andimmovable of the deceased intestate.

39. Consequent to the removal of the concept of heirs there is doubt as towhether real property exists in Singapore.1 In any event as is discussed below mostof the land in Singapore is held by individuals under leaseholds or the estate inperpetuity which is a creation of the State Lands Act and not a common lawfreehold estate like the fee simple.2 For all these reasons and, notwithstandingthat the term real property is still commonly used when referring to interests inland, the more useful classification of property is that of movable and immovableproperty.3

1. See Braddell, ‘Heirs and the Common Law’ (1941) MLJ xxxvi–xlv.2. See Part I Immovable and Real Property Chapter 1 General Classification.3. See below.



40. By common law and by statute land and all things permanently attached toland are classified as immovable property.1 All interests in land, including lease-holds, are immovable property while all other forms of property, chattels, chosesin action, and intellectual property fall into the category of movables.

1. E.g. Section 2 Interpretation Act Cap. 1 1984 Rev Ed., Section 4 Land Titles Act Cap. 157 1994Rev Ed.

C. Movable and Personal Property

41. In general, the common law draws a distinction between real and personalproperty, not between movable and immovable property. One exception lies in theconflict of laws, where the distinction is made in an attempt to achieve greaterharmony with the property rules of civilian jurisdictions. Consequently, our courtsapply a different choice of law rule to immovable and movable property. However,in its determination of whether property situated in Singapore is an immovable ormovable, the court will utilize its own notions of ownership, such as the equitabledoctrine of conversion. Consequently, land over which there is an enforceableagreement to sell is considered money and hence movable property, even prior tocompletion of the sale, as equity deems done that which ought to be done.1

1. MTT ARSAR Meyammai Achi v. Valliammai (OS 659/1992, S/C 2137/94, 23 March 1995), cf.TM Yeo [1997] SJICL 560.

42. Our statutes also refer to immovable and movable property, the definitionof which is provided in the Section 2(1) of the Interpretation Act.1 ‘Immovableproperty’ includes land, benefits to arise out of land and things attached to the earthor permanently fastened to anything attached to the earth. ‘Movable property’means property of every description except immovable property. These definitionsreflect the residual character of movable property. These definitions do not, how-ever, apply where ‘there is something in the subject or context inconsistent withsuch construction or unless it is therein otherwise expressly provided.’ In the MTTcase above, for example, the High Court of Singapore did not refer to the defini-tions in the Interpretation Act when examining the provisions of the Intestate Suc-cession Act,2 Section 4 of which states that disposal of movable property is governedby the lex domicilii and immovable property by the lex situs.

1. Cap. 1 1985 Rev Ed.2. Cap. 251 1985 Rev Ed.

43. Again, there are statutes which contain their own definitions of ‘movableproperty’. For example, Section 22 of the Penal Code1 provides that ‘The words“movable property” are intended to include corporeal property of every description,except land and things attached to the earth, or permanently fastened to anythingwhich is attached to the earth.’ In these instances, movable property loses itsresidual status. Given such a restrictive definition, the criminal laws of Singaporedo not, in general, cover dealings with choses in action. There can, for example,be no theft of a bank account even where value has been abstracted from the



account by a direct withdrawal, and a fortiori where there is only an electronicfunds transfer.2 Partly for this reason, jurisdictions like the UK, NZ and India haveintroduced specific legislation to cover intangible property like electricity.3

1. Cap. 224. 1985 Rev Ed.2. See R v. Preddy [1996] 3 WLR 255 (HL), where a direct withdrawal would otherwise have been

caught by the UK legislation.3. Section 13 UK Theft Act 1968; Section 218 NZ Crimes Act 1961; Section 39 Indian Electricity

Act 1910. There is no equivalent provision in Singapore.

44. Personal Property can be divided into chattels personal and chattels real.The latter are leasehold interests in land. Chattels personal divide into choses inpossession and choses in action.1

1. Colonial Bank v. Whinney (1885) 30 Ch D 261. See Part II below.

III. Trust and Fiduciary Mechanisms

A. Trusts and Equitable Interests

45. Equity evolved a highly developed form of conscience through its doctrineof notice and thus elevated the right of a beneficiary under a trust from a merepersonal right to a proprietary interest. The equitable interest exists in all forms ofproperty immovable and movable, real and personal. It is good against the wholeworld except for the bona fide purchaser without notice,1 while the legal interest isenforceable against the whole world.2

1. The equitable doctrine of notice refers to actual notice, imputed notice and constructive notice,Hunt v. Luck [1902] 1 Ch 428. It has been enacted in Section 70 Conveyancing and Law ofproperty Act Cap. 61 1994 Rev Ed.

2. This is reflected in the maxim nemo dat quod non habet. However in regard to legal interestsin land the order of priorities has been affected by the registration systems. See below Part IChapter 3.

46. English principles of equity together with equitable interests in land werereceived into the law of Singapore by the Second Charter of Justice 1826. Fusionof the administration of law and equity was effected by Section 3 Civil law Enactment1878.1 Section 3 Application of English law Act continues the reception up to thecut off date of 11 November 1993. Thus title to all property may be held in lawor in equity and common law and equitable remedies are available in the Courts.2

1. Now Sections 3 & 4 Civil Law Act Cap. 43 1994 Rev Ed.2. Sections 3 & 4 Civil Law Act.

47. In Singapore ownership of property may be divided into legal and equita-ble. Equity follows the law. Thus the equitable estate in land may be in fee simpleor in perpetuity or a it may be a lease. The split of ownership into legal andequitable ownership in different persons may be voluntary and expressed, e.g., anexpress trust. For example, S the owner of the legal fee simple estate may transferit to T in trust for B for life remainder to C in fee simple. T is the trustee having



the legal fee simple. B and C have the beneficial interest, B taking a life interestand C taking the fee simple on B’s death.

48. The split into legal and equitable ownership may also occur by operation ofthe rules of equity, e.g., the purchaser’s interest and the vendor’s lien in a contractfor the sale of land. In a contract for the sale of land where the remedy of specificperformance is available the purchaser is regarded as the equitable owner. The legaltitle is with the vendor so that he is called a constructive trustee. To ensure that heis paid the full purchase price equity imposes in his favour the vendor’s lien. Unlessthe ownership is split the legal interest carries with it the equitable interest but theequitable interest cannot exist on its own independent of the legal interest.

49. Once the equitable interest is in existence it may be disposed of inter vivosor by will, e.g., transferred by way of gift or sale, mortgaged or charged. Thedifference in the manner of disposal in inter vivos dealings lies in the formalities.A disposition of an equitable interest requires only writing.1 A trust may also becreated out of an equitable interest; the trustee would have the equitable title andthe beneficiary the beneficial interest.

1. Section 6B Civil Law Act.

50. The remedies of the owner of an equitable interest are the injunction,tracing and also the erstwhile common law remedy of damages.1 For example, ifT the trustee of property were to transfer it to X by way of a gift in breach of trust,B the beneficiary would have several remedies at his disposal. He may sue T in apersonal action for breach of trust. He may also trace his property to X and recoverit from X through the constructive trust. Should X no longer have the property Bmay sue him in a personal remedy and recover from him the equivalent value ofhis property in compensation.2

1. Section 18(2) Supreme Court of Judicature Act Reprint Singapore Statutes Cap. 322 Rev Ed.2. Nocton v. Lord Ashburton (1918) AC 932; Ohm Pacific v. Ng Hwee Cheng [1994] 2 SLR 576

at pp. 585–6.

51. A trustee of an express trust has all the duties and powers given to him inthe trust deed. But all trustees must not profit from his position of trustee. Wherehe does so the beneficiary may sue him for the profits.1 He must not place himselfin a position where his duties as a trustee may possibly conflict with his ownpersonal interest2 or where he is a trustee of two trusts his duties to each of the trustmust not conflict.

1. Sumitumo Bank v. Kartika Ratna Thahir [1993] 1 SLR 735; AG for Hong Kong v. Reid [1993]AC 713.

2. Keech v. Sandford (1726) 25 ER 223; Phibbs v. Boardman [1967] 2 AC 46; Hytech Buildersv. Tan Eng Leong [1995] 2 SLR 795.

B. Fiduciaries

52. The trustee is the model for equity pinning liability on other persons whoare entrusted with or who have undertaken the obligation of looking after another’s



interest. These persons are called fiduciaries. While the term of fiduciary still awaitsunambiguous definition it is accepted that a fiduciary is a person who has under-taken an obligation to look after another’s interest and who wields influence overthe other. As of now certain positions automatically attract the label of fiduciary.Common examples are the director of a company, an agent, partners in a partner-ship. It would seem that the mantle of a fiduciary would be dropped on a personwhere the courts feel that a person in such a position should owe the other persona duty on account of the obligation undertaken. Once a person is called a fiduciaryhe is under a duty not to profit from his position and he should not place himselfin a position of conflict.1

1. See ftntes vii, viii & ix above.

IV. Possession and Title

53. The common law protects possession and the right to possess. The locusclassicus is Amory v. Delamirie.1 As common law was received into Singapore thisis also the law in Singapore.

1. (1722) 1 Strata 505, 93 ER 664.

54. Prior to amendment in 1993, Section 9 Limitation Act1 provided that twelveyears occupation of land of another nec vi, nec clam, nec precario barred the rightof the owner of the land from any action to recover his land.2 Moreover underSection 18 Limitation Act the owner’s title to that land was statutorily extin-guished. The adverse possessor then became the owner of the land by virtue of hisadverse possession. Thus in Singapore the link between possession and the right topossession and title to land was very clear.

1. Cap. 163 1985 Rev Ed.2. Soon Peng Yam v. Maimon binte Ahmad [1996] 2 SLR 609; Jubilee Electronics Pte. Ltd. v. Tai

Wah Garments & Knitting Factory Pte. Ltd. [1996] 2 SLR 39.

55. However with effect from the enactment of the Land Titles Act 19931 apartfrom transitional provisions it is not possible for land to be acquired by adversepossession any more.2 Title to land can only be acquired under one of the consen-sual methods by conveyance from one owner to another.

1. 15 March 1994.2. Section 177 Land Titles Act 1993 amended Section 9 Limitation Act by the addition of subsec-

tion (3) which provided that the section shall not apply to an action to recover land from aperson by reason only of his authorized occupation of the land. The transitional provisionspermitted claims to adverse possession to be made at most within 6 months of the commence-ment of the Land Titles Act 1993. This Act commenced on 15 March 1994. However, the Actdid not affect land which was already in adverse possession for 12 years prior to the cominginto force of the Act. See Bhalwant Singh v. Double L & T Pte. Ltd. [1996] 2 SLR 726; TanSiok Gek v. Ng Kim Neo [1997] 2 SLR 691.

56. But in an action to evict a trespasser from land the plaintiff still has toprove that he has possession or the right to possess. In short the law still protects



ownership by protecting possession. The amendment to Section 9 Limitation Actsimply means that true owner can always sue the trespasser no matter how long thetrespasser has been in possession.

57. The law relating to chattels remains as at common law.

57 General Introduction, Introduction to the Law


Selected Bibliography

G.W. Bartholomew, Introduction in Tables of the Written Law of the Republic ofSingapore: 1819–1981 Volume 1 – Local Legislation Singapore.

A.P. Bell, Modern Law of Personal Property in England and Ireland (1989).M. Bridge, Personal Property Law (2nd ed, 1996).H. Chan, The Legal System of Singapore (1995).R.G. Hammond, Personal Property Commentary and Materials (1992).R.M. Goode, Legal Problems of Credit and Security (1988).F. Oditah, Legal Aspects of Receivables Financing (1991).W.J.M. Ricquier, Land Law (2nd ed, 1995).S.Y. Tan, Principles of Singapore Land Law (1994).S.Y. Tan, Private Ownership of Public Housing in Singapore (1988).


Selected Bibliography


Part I. Immovable Property andReal Property

Chapter 1. General Classification

§1. Classification

58. Although it is accepted that property comprises rights, what is owned arerights over objects, yet generally the term property has come to be associated withthe objects themselves. Thus in this sense traditionally property may be classifiedin different ways: movable and immovable, tangible and intangible, corporeal andincorporeal.

59. The feudal concept of estates in land together with the doctrine of tenurecame to Singapore via the English common law. Property is thus also classified intoreal and personal property. Freehold estates in land are real property. But theleasehold estate is a chattel real and is personal property.

60. Since 1837, land, regardless of whether it is freehold (real property) orleasehold (chattels real), for the purposes of devolution and transmission has de-volved to the deceased personal representatives where it is available, together withthe personal property of the deceased, for the payment of the deceased’s debts.1

After the payment of debts the practice developed whereby the personal representa-tives then distributed the estate regardless of whether it consisted of real or personalproperty to the deceased’s next of kin.2 This has since been incorporated intoSection 5 Intestate Succession Act.3 Thus the concept of the heir is irrelevant inSingapore. Hence there is a doubt as to whether real property still exists in Singa-pore.4 The debate is more of an academic one since the modern preference inlegislation is to refer to land simply as such, e.g., the Land Titles Act or as immov-able property rather than to use the archaic term real property, e.g., the IntestateSuccession Act.

1. Currently the provision is Section 35(1) Conveyancing and Law of Property Act Cap. 61 1994Rev Ed.

2. Syed Ali bin Alsagoff v. Syed Omar bin Alsagoff (1918) SSLR 103.3. Cap. 146 1985 Rev Ed.4. Braddell, ‘Heirs and the Common Law’ (1941) MLJ xxxvi–xlv.

58–60


§2. Land and Fixtures

61. Land bears the meaning as at common law unless a particular statute de-fines it for that statute. Thus land is understood as covering the surface of the earthtogether with the trees, buildings, minerals and airspace above it.1 Section 6 Con-veyancing and Law of Property Act adopts the common law definition in that itprovides that a conveyance of land is deemed ‘to include buildings, erections,fixtures, hedges, ditches, fences. . . .’ Likewise Section 4 Land Titles Act2 in de-fining land also includes the ‘structures affixed thereto’. The only exception to thisis traditional Malay houses on stilts which by custom are regarded as chattels.3 Thedefinition of land in Section 4 Land Titles Act includes airspace or subterraneanspace held apart from the surface of the earth delineated and described with cer-tainty. This makes it possible for such delineated air spaces or subterranean spacesto be owned under the Land Titles (Strata) Act.4

1. Section 3 Application of English Law Act. Kim Beng Lee Pte. Ltd. v. Kosion Enterprise (S) Pte.Ltd. [1994] 1 SLR 700 where Selvam JC held that a Mass Rapid Transport viaduct over landwould intrude on the ownership of the said land.

2. Cap. 157 1994 Rev Ed.3. Kiah binte Hanapiah v. Som [1953] MLJ 82; Chua Sai Ngoh v. Beh Ai Meng [1955] MLJ 167

cf. Kwek Kim Hock v. Ong Boon Siong [1954] MlJ 253; and Khew Ah Bah v. Hong Ah Mye[1971] MLJ 86.

4. Cap. 158 1988 Rev Ed.

62. The maxim quid quid plantatur solo, solo cedit applies thus chattels fixedpermanently to land or to a building on land as part of the land become fixtures andso part of the land.1 People’s Park Chinatown Development Pte. Ltd. v. SchindlerLifts (S) Pte. Ltd.2 is the latest Court of Appeal decision which applied Holland v.Hodgson.3 Taking into consideration the manner and degree of annexation as wellas the purpose of annexation the Court of Appeal held that escalators which wereresting on their own weight in specially created places in the building were fixtures.

1. Van Santen v. Lim Jee Jing (1903) SSLR 3; Goh Chong Hin v. The Consolidated Malay RubberEstates Ltd. (1926) 6 FMSLR 86, Gebreuder Buehler AG v. Peter Chi [1988] 3 MLJ 69.

2. [1993] 1 SLR 591.3. (1872) LR 7 CP 328.

§3. State Lands

I. State Grants and State Leases

63. All land in Singapore unless alienated belongs to the State. The right of theState to alienate land vested in it is not expressly provided in any statute. It is aninherent right of ownership. In providing for the terms under which individualsmay be granted land by the State and by giving the President the power to makerules for the disposal of State land, the State Lands Rules,1 the State Lands Act bynecessary implication, recognizes the right of the State to dispose of State land.2 NoState land may be alienated without the approval of the President. While indivi-duals may apply under the State Lands Rules for land to be alienated to them the

61–63 Part I, Ch. 1, General Classification


Urban Redevelopment Authority, a statutory corporation, is the main agent respon-sible for releasing and allocating lands for development.3

1. Cap. 314 R 1 1994 Rev Ed.2. Cap. 314 1997 Rev Ed.3. Section 3 Urban Redevelopment Authority Act Cap. 340 1990 Rev Ed.

64. The State may grant land to individuals in estates in perpetuity, leaseholdsor in fee simple. The estate in perpetuity is granted to the grantee forever. A Statelease may be for any period and in the past terms for 999 years were not uncom-mon. In recent years the 99-year lease is the norm for land earmarked for residen-tial purposes. Both these types of estates, the estate in perpetuity and the Statelease, are subject to conditions and covenants implied by the Act. These conditionsand covenants provide for the payment of an annual rent and reserve to the Statevarious rights such as the right to mine for minerals.1 A breach of the covenant topay rent empowers the State to sell the land and a breach of any other covenantentitles the State to re-enter and forfeit the land. Subject to this the grantee of anestate in perpetuity has the interest forever and the holder of a State lease has ituntil the expiration of the lease.

1. Sections 5 and 7 State Lands Act.

II. Grants in Fee Simple

65. The fee simple estate was granted by the East India Company before theregularization of land grants under the first Crown Lands Ordinance. Howeversince 1902 fresh State lands may not be granted by way of fee simples. The StateLands Act provides for the grants in fee simple only in these instances:1. where existing grants of fee simples are defective or boundaries are disputed,2. where for the convenience of the government, the owner of land held in fee sim-

ple has to surrender the grant, he may be granted a new fee simple of the sameor other land in lieu,

3. where a person applies for a strip of land adjacent to land which he alreadyhold in fee simple, the grant of the strip may be in fee simple,

4. where the holder of a fee simple estate desires to develop and subdivide theland he may surrender the holding for a re-grant of one or more titles similarto the one surrendered.

III. Reversion to State

66. Alienated land may revert to the State in the following ways:1. In the case of a State lease, on the expiration of the lease the land will revert

to the State.2. The State may exercise its right of re-entry and forfeit the estate in perpetuity

or the State lease where the grantee has breached a condition or covenantimplied by the State Lands Act.1 Where the breach is of payment of rent the

General Classification, Part I, Ch. 1 64–66


land may be sold by the State. In the event that the land cannot be sold toanother individual the land reverts to the State.2

3. Where the grantee or lessee or his successor has abandoned the land for threeyears and above the land reverts to the State although the land may be in theactual occupation of some individual.3

4. Where land has been granted free from rent or at a nominal rent for religiousor charitable purposes, it shall be forfeited and vest in the State should it beused for another other purposes.4

5. Where a person dies intestate his land together with all his other property willgo to the State where no one is entitled to his estate.5

6. Aside from land reverting to the State in the circumstances given above all landis susceptible to compulsory acquisition by the State under the Land Acquisi-tion Act,6 where it is required for a public purpose or for a public authority.Where land is acquired under the Land Acquisition Act compensation ispayable.7

1. Sections 7(1)(e) and 2(b) State Lands Act.2. Sections 5, 6 and 16 Land Revenue Collection Act Cap. 155 1985 Rev Ed.3. Sections 9, 10 and 12 State Lands Encroachment Act Cap. 315 1985 Rev Ed.4. Section 10 State Lands Act.5. Sections 7 & 9 Intestate Succession Act Cap. 146 1985 Rev Ed.6. Cap. 252 1985 Rev Ed.7. The quantum is assessed at the market value at January 1992 in respect of land acquired after

January 1993. Land Acquisition (Amendment) Act 1993.

66 Part I, Ch. 1, General Classification


Chapter 2. Legal and Equitable Interests

67. Historically interests that are recognized by the common law courts arelegal interests. Such interests are created only when the required forms are used.Currently the conveyance of all interests in land except for the lease of seven yearsand below has to be by deed in the English language.1 Where this is complied withthe legal interest is transferred. A legal title is good against the whole world. Thusin a situation where there is a conflict between two or more legal interests the firstin time will prevail.

1. Section 53 Conveyancing and Law of Property Act Cap. 61 1994 Rev Ed.

68. English principles of equity together with equitable interests in land werereceived into the law of Singapore by the Second Charter of Justice 1826. Fusion ofthe administration of law and equity was first effected by Section 3 Civil Law Enact-ment 1878.1 Section 3 Application of English law Act continues the reception up tothe cut off date of 11 November 1993. Thus title to all property may be held in lawor in equity and common law and equitable remedies are available in the Courts.2

1. Now Sections 3 & 4 Civil law Act Cap. 43 1994 Rev Ed.2. Sections 3 & 4 Civil law Act Cap. 43 1994 Rev Ed.

69. At common law all conveyances of any interest in land except for leasesof over seven years require deeds in the English language. Thus a lease of eightyears in writing in the Chinese language is void at law. However, in equity thelease is good.1 Similarly if the legal owner of an interest in land were to create amortgage in an informal manner, e.g., by deposit of title deeds the mortgage is anequitable one.

1. Parker v. Tarswell (1858) 2 De G & J 560; Walsh v. Lonsdale (1882) 21 Ch D 9; Bannerji v.Chin Cheng Realty (Pte.) Ltd. [1983] 2 MLJ 18; Khoo Keat Lock v. Haji Yusof & Ors (1929)SSLR 210.

70. Whether an interest in property is legal or equitable depends on factorssuch as the interest owned by the grantor, the mode of transfer, or the nature of thetransaction. For example, if A is the owner of an estate in perpetuity in Blackacre,he can convey the estate by deed in the English language to B. B then has the legaland equitable interest. Alternatively A can convey the estate by deed to T in trustfor B. In this situation T has the legal title while B has the equitable interest. WhenB then deals with his interest, e.g., by way of a mortgage, the interest that hismortgagee gets is an equitable interest.

71. Equity looks at the substance and not the form. This maxim of equity is thebasis of some equitable interests, e.g., the equity of redemption. In form the legalmortgage takes the form of a conveyance with a proviso for redemption. But equityprotects the right of redemption beyond the contractual date and recognizes themortgagor as the real owner of the land. The mortgagor thus has an equitable

67–71


interest in the land, the equity of redemption,1 and not just a mere contractual rightto redeem.

1. Casbourne v. Scarfe (1738) 1 ATK 603; Re Wells, Swinburne-Hanham v. Howard [1933] Ch380; cf. DBS Finance Ltd. v. Prime Realty [1991] 3 MLJ 96 where by way of dicta the HighCourt stated that the mortgagor of an equitable interest in land did not have any estate legal orequitable in the land but had only an equity of redemption.

72. The maxim, equity looks on that as done which ought to have been done,is yet another source of the recognition of equitable interests. Thus a valid and bind-ing contract for the sale of land gives to the purchaser an equitable interest in theland.1 Likewise an agreement for a lease gives rise to an equitable lease.2 Anotherexample of an equitable interest is that of the restrictive covenant developed byEquity to complement the common law easement.3

1. Lysaght v. Edwards (1876) 2 Ch D 499; Christina Lee v. Eunice Lee [1993] 3 SLR 8; Chi LungSendiran Berhad v. Attorney General [1993] 2 SLR 629.

2. Walsh v. Lonsdale (1882) 2 Ch D 9.3. Tulk v. Moxhay (1848) ER 114.

73. An equitable interest is enforceable against the whole world except for thebona fide purchase of the legal interest without notice. In the context of prioritiesnotice means actual notice, imputed notice and constructive notice.1 Except whereotherwise provided by statute priorities of equitable interests are governed by theequitable maxims: where the equities are equal the first in time prevails, and wherethe equities are equal the law prevails. Within the term equities are the factors ofbona fides, value and notice. Because of the stretch of constructive notice, noticewhich a person is deemed to have from that of which he has actual notice, statuteswhich provide for registration whether of deeds or of title expressly state that wherethe deed or title is registered the person who has registered has priority notwith-standing that he may have actual notice of the existence of the prior interest.2

1. The equitable doctrine of notice has been incorporated in Section 70 Conveyancing and Law ofProperty Act Cap. 61 1994 Rev Ed.

2. E.g. Section 14(4) Registration of Deeds Act Cap. 269 Singapore Statutes 1989 Rev Ed., Section47 Land Titles Act Cap. 57 1994 Rev Ed. See below Chapter 3 Registration Systems.

74. Aside from established equitable interests there are also rights commonlyreferred to as ‘equities’. Essentially an equity is a right recognized by equity torecover property transferred, to enforce a right of occupation or to set aside atransaction. The basis for the existence of such a right can be fraud, undue influenceor mistake. While such rights are in the nature of personal rights sometimes re-ferred to as ‘personal equities’ yet in certain circumstances they may be enforceableagainst third parties. In terms of priorities an equity is not equal to an equitableinterest.1 Thus in a contest between an earlier equity and a purchaser of a laterequitable interest the earlier equity will not bind the later equitable interest unlessthe purchaser was without notice of the equity. In spite of its lesser range ofenforceability there is growing support for the view that an equity is within therealm of proprietary interests.2 Where the equity is in the form of a right to occupyland, e.g., in the case of a licence based on an estoppel the extent to which it will

72–74 Part I, Ch. 2, Legal and Equitable Interests


affect a third party is still in some doubt, although the better view may be that itshould only bind a subsequent purchaser only if he has been guilty of actual fraudor where he has given an express undertaking to honour the licence.3

1. Phillips v. Phillips (1862) 4 De GF & J 208; Latec Investments Ltd. v. Hotel Terrigal Pty. Ltd.(1965) 113 CLR 265.

2. See footnote above and Wade, [1955] CLJ 482, Crane (1955) 19 Conv (NS) 346; Jackson,Principles of Property Law, 1967.

3. Ives Investment v. High [1967] 2 QB 379; Inwards v. Baker [1965] 2 QB 29; Binions v. Evans[1972] Ch D 359; Ashburn Anstaldt v. Arnold [1989 ] Ch 1. See also Ricquier and Soon, ‘TheLicence coupled with an Equity in Singapore and Malaysia’ (1981) 23 Mal LR 123, Battersby,‘Contractual and Estoppel licences as Proprietary Interests’ (1991) Conv. 36.

75. As is discussed in Chapter 3 below there is in place in Singapore a systemof registration of titles under the Land Titles Act.1 Under this regime all transfersof land under the Act must be by way of registration. The question that arises iswhether equitable interests exist under this system. It would seem that it is acceptedthat the Land Titles Act recognizes the existence of equitable interests. Section 115permits a person who claims an interest in land to lodge a caveat and Section 4defines an interest in land by reference to the general law.2 Further it would seemthat in spite of the explicit provisions of the statute even personal equities mayadversely affect third parties who have registered interests.3

1. Cap. 157 1994 Rev Ed.2. See also Jackson, ‘Equity and the Torrens System: Statutory and other interests’ (1964) 6 Mal

L R 146.3. See below Chapter 3 Registration Systems.

76. The list of equitable interests is not closed. But while there are rights whichare enforced against some third parties, until the recognition goes to the extent ofenforceability against the whole world except for the bona fide purchaser of thelegal interests, such rights are called mere equities.1 As discussed above, equitiesare personal rights which may be enforceable against a party other than the imme-diate party concerned on account of some element of fraud or unconscionability.

1. There are also personal rights which do not affect any third party on policy grounds, e.g.National Provincial Bank v. Ainsworth [1965] AC 1175.

Legal and Equitable Interests, Part I, Ch. 2 75–76


Chapter 3. Registration Systems

§1. Registration of Deeds

I. In General

77. Currently there are two systems of registration applicable to transactionsrelating to land. First there is the registration of deeds system which was introducedinto Singapore in 1886 with the enactment of the Registration of Deeds Ordinancebased on the English Yorkshire Registry and Middlesex Registry Acts.1 The statutein force is the Registration of Deeds Act.2 This Act applies to dealings in land towhich the general law of conveyancing applies. This is all land except those whichare under the Land Titles Act.3

1. Yorkshire Registry Act 1703, Middlesex Registry Act 1708.2. Cap. 281 1989 Rev Ed.3. Cap. 157 1994 Rev Ed. Discussed below.

78. Under the general law conveyances of interests in land except for the leaseof seven years and below have to be by deed in the English language.1 While thedeed is required to pass the legal interest, equitable interests are created with noformality since equity works on intention, on substance rather than the form. Underthis system of conveyancing dealings in land are completely private acts and secrecyprevails. Where conflicting interests arise in respect of the same interest in land thepriorities are regulated by the equitable maxims: where the equities are equal thefirst in time has priority, where the equities are equal the law prevails. Under thesemaxims the protected person is the bona fide purchaser for value of the legalinterest without notice. Thus in this regime of conveyancing and regulation ofpriorities there is much opportunity for fraud to be practised.

1. Section 53 Conveyancing and law of Property Act Cap. 61 1994 Rev Ed.

II. Reasons for Registration

A. Admissibility as Evidence of Title

79. Under the Registration of Deeds Act, deeds relating to land may be regis-tered in the Registry of Deeds. Deeds which may be registered include the convey-ance, lease and agreement for lease by deed and the memorandum of a lien orcharge.1 Registration of a deed is not required for validity but under Section 4unless a deed relating to land is registered it shall not be admissible in court asevidence of title.2 This provision caused many problems such as that in Ho HongBank v. Teo Chin Chay and the cases that preceded it. In Ho Hong Bank a mort-gagor tried to get out of the mortgage by deposit of title deeds by pleading that themortgagee could not sue on the mortgage as the memorandum of the mortgage had

77–79


not been registered so that it could not be used as evidence in court. The court heldthat the document was admissible as evidence of the contract of the mortgage.Section 4 has little to do with the prevention of fraudulent dealings. Instead it wasenacted to enable the then colonial administrators to keep a record of land dealingsfor collection of taxes and other administrative reasons.

1. Section 2 Registration of Deeds Act.2. Ho Hong Bank Ltd. v. Teo Chin Chay (1929) SSLR 195.

B. Priority

80. Another reason for registration is to secure priority. Where there are twodeeds relating to the same interest in land the first to be registered has priorityexcept where there is actual fraud.1 This advantage accrues only to the purchaser.But where a deed is invalid or void registration does not make it valid. Under theRegistration of Deeds Act the importance of the equitable doctrine of notice isdiminished and the equitable maxims of regulating priority are no longer relevantexcept in the rare situations where the transactions are not in deed form and so arenot registrable under the Act.2

1. Section 14 Registration of Deeds Act.2. Rodger v. Harrison [1893] 1 QB 161; Khoo Keat Lock v. Haji Yusop (1929) SSLR 176; Syed

Omar v. Somasundram Chitty (1910) 11 SSLR 38.

81. By giving priority to the first to be registered of two or more deeds relatingto land the objective of preventing fraud is partially met. However, not all dealingsaffecting land require a deed. For example, equitable interests created under acontract for sale, equitable leases may be effected without any formality. Wherethis is the case there is no deed to be registered. In such cases the Registration ofDeeds Act is not applicable. Priority then is still regulated by the equitable maxims.An exception is made in the case of the equitable mortgage, lien or charge whereSection 6 provides that a memorandum of the lien or charge must be registered tobe effective against a subsequent purchaser for value.1

1. Chung Khiaw Bank Ltd. v. United Overseas Bank Ltd. [1970] 1 MLJ 185.

82. However, recently by providing for caveats of interests in land to be reg-istered the equitable interests are now capable of being reflected in the Registry ofDeeds.1 Although the provisions for the caveat sit uncomfortably in the context ofthe other provisions, yet if the caveat can be construed as an ‘instrument’ withinSection 14 it can be said that the equitable interest which has a registered caveathas priority over a deed which is registered after it.2 In any event the very fact ofthe existence of the caveat would give notice to all the world of its existencethereby even in this limited way, removing one of the weaknesses of the system.But in any event this system of registration of deeds is being replaced by a morecomprehensive system of registration, viz., title registration.

1. Section 8 Registration of Deeds Act.2. See S.Y. Tan, (1988) 30 Mal. LR 371–376.

Registration Systems, Part I, Ch. 3 80–82


III. Problems

83. Some of the difficulties with the Registration of Deeds Act stem from thefact that registration of the deed relating to land is not compulsory. For example,doubts have been raised as to whether a second conveyance of the same interest inland which is registered but the first conveyance is not, is an issue of priority orone of validity.1 This is one aspect of the main problem which is the extent towhich the general law of conveyancing has been superseded by the provisions ofthe Act.2

1. Ng Boo Bee v. Khaw Joo Choe (1921) 14 SSLR 90, Bank of China v. The First National Bankof Boston [1992] 1 SLR 441.

2. See Chia Guan Chip v. Dunlop (1901) 6 SSLR 98.

§2. Land Titles Act

I. Bringing Land under the Land Titles Act1

84. In 1956 the Land Titles Act was enacted which introduced into Singaporethe Australian Torrens system of title by registration. Under this system a Registryof Land Titles was established.2 Dealings in land under the Act have to be regis-tered in the Registry of Titles in order to effect the transfer of the interest in land.3

Registration is required for validity. Deeds are no longer relevant and there is nomore secrecy of dealings with land. The register is conclusive evidence of title.4

The objective of this transparent system of dealings in land is to facilitate dealingsespecially for purchasers.

1. Cap. 157 1994 Rev Ed.2. Sections 5–7, 28(1) & (2) Land Titles Act.3. Section 45 Land Titles Act.4. Section 36 Land Titles Act.

85. Land is brought under this system in many ways. New State grants orleases of land are made under the Land Titles Act.1 There is provision for voluntaryconversion of land to the ‘new’ system.2 Then there are situations for effecting the‘conversion’ compulsorily. Owners who intend to develop land are required tosubmit the titles to the Registrar for conversion to the Land Titles system.3 Sincethe whole scheme of strata titles rest on registration of titles and is only availableto land under the Land Titles Act this is an effective method of conversion. Finallyas a catch all provision the Registrar may elect to bring a piece of land under theAct under Section 22. It is anticipated that all land would be governed by the LandTitles Act within the next few years.

1. Section 8 Land Titles Act.2. Section 19 Land Titles Act. A person who has a fee simple, or an estate in perpetuity or a State

lease with at least ten years to run may apply to have the land brought under the Act.3. Sections 9, 10 & 23 Land Titles Act.

83–85 Part I, Ch. 3, Registration Systems


II. Qualified Titles

86. In order to facilitate conversion without immediately wiping out existingencumbrances a ‘qualified’ title may be registered.1 This involves the Registrarendorsing a ‘caution’ on the title when the title is issued.2 With this ‘qualified’ titlethe land is brought under the Act and all subsequent dealings are governed by theAct.3 However, existing encumbrances are protected and the registered title wouldbe subject to them for a limited period.4 A purchaser of a qualified title may applyto have his title made unqualified on the expiration of five years from the date ofthe last conveyance cancelled by the Registrar upon creation of the qualified title.5

Otherwise the proprietor may apply after 12 years from the issuance of the qualifiedtitle.6 On the lapsing or cancellation of the caution the title would become anunqualified one and all erstwhile encumbrances would be wiped out unless they areprotected by caveats.7

1. Section 21 Land Titles Act.2. Section 25 Land Titles Act.3. Section 21(3) Land Titles Act.4. Section 25(1) Land Titles Act.5. Section 25(3) Land Titles Act.6. Section 26 Land Titles Act.7. Section 25(5) Land Titles Act.

III. Effect of Registration

87. Once land is governed by the Land Titles Act certain dealings to be effec-tive and valid must be registered.1 The owner of an interest in land is called theregistered proprietor. Subject to the other provisions of the Act the register isconclusive evidence that the person registered is the proprietor.2 Dealings whichhave to be registered include transfers, leases of over seven years, mortgages andcharges, transmissions and easements.3 On registration not only is the interest passedto the new registered proprietor, he also has a title which is indefeasible subjectonly to for registered interests and notifications and a list of overriding interests.4

The registered title is defeasible where there is actual fraud by the registered pro-prietor himself or his agent.5 Other grounds for defeating a registered title includetrust and contractual obligations entered into by the registered proprietor himself.6

As between two or more registered interests the first to be registered has priority.7

1. Section 45 Land Titles Act.2. Sections 36 & 46 Land Titles Act.3. Sections 63, 68, 107, 96, 97, 110 & 132 Land Titles Act.4. Section 46 Land Titles Act.5. Sections 46, 47, 154 & 157 Land Titles Act.6. Section 46(2) Land Titles Act.7. Section 48 Land Titles Act.



IV. Indefeasible Title

A. Assurance Fund

88. As stated above the registered proprietor has an indefeasible title subjectonly to such overriding interests and exceptions as set out in the Act. As with allother Torrens systems only purchasers have the benefit of indefeasibility of title.1

There is also an Assurance Fund which persons who have suffered loss as a resultof the provisions of the Act may apply to for compensation.2 To date there has beenno payment out of this Fund.

1. Section 46(3) Land Titles Act.2. Section 151 Land Titles Act.

B. Overriding Interests

89. The list of overriding interests consists of the usual provisions, e.g., existingreservations, conditions in State grants, subsisting easements, short term tenancies,the right of the Registrar to correct for mistake. More unusually Section 46 LandTitles Act also includes as an overriding item, a power in the court to correct theregister on grounds of mistake, omission and fraud caused or substantially contrib-uted to by the act, neglect or default of the proprietor.1 Unless these terms are givena narrow construction the concept of indefeasibility of title could be rendered ashadow of what it was intended to be.

1. Sections 46(1)(e), & 160 Land Titles Act.

C. Exceptions

90. The main exception to the title of the registered proprietor being indefea-sible is where there is actual fraud.1 Even where the registration is based on aforged or void instrument the registered title is good and indefeasible.2 MoreoverSection 47 clearly states that mere notice of the existence of a prior unregisteredinterest will not affect the indefeasible title. Case law has established that onlyactual fraud, dishonesty of some sort, by the registered proprietor or his agent willdefeat the registered title.3 However, just as the registered title is subject to contrac-tual or trust claims against the registered proprietor so it should also be subject to‘personal equities’, viz., in personam actions based on equity.4

1. Section 47 Land Titles Act, Assets Company v. Mere Roihi [1905] AC 176.2. Section 46 Land Titles Act, Frazer v. Walker [1967] 1 AC 569; Alrich Development Co. Ltd.

v. Jumabhoy [1995] 2 SLR 401. Cf. UOF Ltd. v. Sakayanary [1997] 3 SLR 211 where the HighCourt held that a conveyance by personal representatives more than six years after the death ofthe deceased without the sanction of the court as prescribed by Section 35(2) Conveyancing andlaw of Property Act was within the Court’s powers of rectification under Section 160.

3. Assets Co. v. Mere Roihi [1905] AC 176; Waimiha v. Waione Sawmilling Co. Ltd. [1926] AC101; Loke Yew v. Port Swettenham Rubber Co. Ltd. [1913] AC 491; United Overseas Finance

88–90 Part I, Ch. 3, Registration Systems


Ltd. v. Yew Siew Keen [1993] 3 SLR 207, United Overseas Finance Ltd. v. Sakayanary [1997]3 SLR 211.

4. Frazer v. Walker [1967] AC; Bahr v. Nicolay (1988) 62 ALJR 268; Mercantile Mutual LifeInsurance Co. Ltd. v. Gosper (1991) 25 NWSLR 32; Goh Swee Fang v. Tiah Juah Kim [1994]3 SLR 881. Cf. Section 160 Land Titles Act.

V. Unregistered Interests and Caveats

91. Where a registered proprietor deals with his interest in a manner which atgeneral law would have created an equitable interest such interest being in an un-registrable form cannot be registered. However, it is still capable of being protectedunder the Act by way of the caveat.1 So interests under trusts and other equitableinterests, e.g., vendor’s lien may be protected by lodging caveats.

1. Section 115 Land Titles Act.

92. A caveat may be lodged by any person who has a claim to an interest inland.1 The registrar is not required to verify the claim.2 The caveat may be in termswhich prohibit the registration of a subsequent dealing without the caveator’s con-sent or unless it is expressly subject to the interest caveated.3 When a prohibiteddealing is lodged for registration the caveator is notified and he could then respondeither by withdrawing his caveat or taking the matter to court.4 Where he fails torespond or where the court does not favour him with its judgement, the registrarwill register the subsequent dealing and the caveat will lapse. Procedures also existfor the caveatee to ask the caveator to show cause as to why his caveat should notbe removed.5 The caveat has been likened to a statutory injunction.6

1. Ibid.2. Section 117(4) Land Titles Act.3. Section 115(2) Land Titles Act.4. Section 120 Land Titles Act.5. Section 127 Land Titles Act.6. Eng Mee Yong v. Letchumanan [1979] 2 MLJ 212; Alrich Development Co. v. Jumabhoy [1993]

2 SLR 441.

93. A caveat takes effect from the date of lodgement and lasts for five yearsunless it has been removed or cancelled.1 It may also be extended for anotherperiod of five years where the interest it protects still exists.2 The lodging of caveatsis important also because in determining the priority between two or more unreg-istered interests, the first to lodge the caveat has priority.3

1. Section 121 Land Titles Act.2. Section 122 Land Titles Act.3. Section 49 Land Titles Act.

94. Where the caveatee has suffered loss on account of the caveat beingallowed to remain ‘wrongfully, vexatiously, or without reasonable cause’ the courtmay require the caveator to compensate the caveatee.1 As currently interpreted bythe High Court ‘wrongfully’ simply means without any legal right requiring no mensrea at all. Such an approach could undermine the rationale of caveats as it may



lead to a disinclination of persons having claims to interests in land from lodgingcaveats.2

1. Section 128 Land Titles Act.2. Tan Soo Leng v. Wee Saktu & Kumar Pte. Ltd. [1993] 3 SLR 569; Eng Bee Properties Pte. Ltd.

v. Lee Foong Fatt [1993] 3 SLR 837. Cf. Beca Developments v. Idameneo (No. 92) Pty. Ltd.(1990) 21 NSWLR 459.

94 Part I, Ch. 3, Registration Systems


Part II. Movable Property and PersonalProperty/Chattels

Chapter 1. General Classification

§1. Tangible Movable Property and Choses in Possession

244. Tangible movable property is not a recognized legal term. It is, however,often used interchangeably with choses in possession, which are personal propertythat can be possessed and do not require the taking of a personal legal action tovindicate. However, common law possessory actions reside in tort (actionable perse) for trespass, conversion or detinue (where money is concerned, the action isnormally one in restitution for money had and received) and they therefore havecertain personal traits, since they only give rise to a claim for damages. Singaporehas not imported the Torts (Interference with Goods) Act 1977 from England, andthere is no specific mechanism to order delivery up at law. A defendant has thechoice of making specific delivery or paying the assessed value of the property.However, courts have exercised an equitable discretion to order delivery up.1 If theclaim is purely personal, there may drawbacks in insolvency in that the claimantwill not have any priority over the claims of other unsecured creditors, unlesscontinued identification of the chattel is possible such that it does not vest in thetrustee in bankruptcy (personal insolvency) or the liquidator (corporate insolvency).Alternatively, a full proprietary claim can be brought in equity, where the rules ofidentification are also more generous.

1. Yoong Yuet Hoe v. Shenson Engineering & Trading (S) Pte. Ltd. [1994] 2 SLR 675, and theRules of Supreme Court O 45 r 4.

§2. Intangible Movable Property and Choses in Action

I. General

245. These forms of personal property cannot be possessed and which centralcharacteristic is that an action has to be brought to realize it. Examples includebank accounts, receivables, company shares, bonds, and intellectual property rights.Like choses in possession, choses in action can be assigned. Exceptionally, theymay not be transferable as there is an element personal to the parties involved.1

Assignments of choses was impossible at law, but possible in equity, although thissometimes meant that the action against the obligor had to be brought in the name

244–245


of the assignor, if not voluntarily as plaintiff, then joined as a defendant. However,compliance with Section 4(6) of the Civil Law Act2 now effects a statutory assign-ment, where joinder of the assignor is unnecessary. This requires the assignment tobe in writing, and written notice to be given to the debtor. Unlike the case withchoses in possession, however, assignments of choses in action are always subjectto prior equities. Further, the issue of priorities is determined by the rule in Dearlev. Hall, i.e., the order in which notice is given to the obligor, rather than the usualrule that the first in time of creation prevails.3 Finally, prohibitions against assign-ment of a chose in action can bind third parties, whereas encumbrances on chattelsare less efficacious against third parties.4

1. Chitty v. Seah Eng Koon [1934] 3 MLJ 164, introduction of word ‘personally’ on a promissorynote had the effect of making the note not negotiable and also prevented a valid assignment ofthe debt in respect of which the notes were given.

2. Cap. 43 1994 Rev Ed.3. Applied in K.A.R. Ramanathan Chetty v. Tan Cheng Hoo & Anor [1934] MLJ 262.4. See Tjio (1994) SAcLJ 159.

246. Many forms of choses in action, for example, intellectual property rightsand company shares, also have their own statutory requirements for transfer. At thesame time, new and novel forms of intangible property abound. And even wherethey are not strictly classified as property, they may have many of the remedialcharacteristics associated with property. For example, although information is prob-ably not a species of property,1 it has been said that ‘equity acts to protect confi-dential information, and the degree of protection afforded makes it appropriate todescribe it as having proprietary characteristics, but that is not because property isthe basis on which protection is given. It is the effect of that protection.’2 It is likelythat the fear of criminal consequences has caused many developed Commonwealthjurisdictions to refrain from treating information as a species of property.3 Whilethere are dangers of looking at the consequences and concluding that because someof the protections accorded to property exist that it must be a proprietary right, thisis less of a problem in Singapore since our criminal legislation does not generallycover choses in action. For example, Section 378 of the Penal Code4 provides thatonly movable property can be stolen, and Section 22 of the Code defines ‘movableproperty’ as ‘corporeal property of every description, except land and things attachedto the earth, or permanently fastened to anything which is attached to the earth.’

1. Boardman v. Phipps [1967] 2 AC 46; Victoria Park Racing and Recreation Co v. Taylor (1937)58 CLR 479.

2. Breen v. Williams [1996] 186 CLR 71 at p. 90 (Dawson, Toohey JJ) noted Nolan (1997) LQR220.

3. Stewart v. The Queen [1988] 1 SCR 963; 50 DLR (4th) 1; see Hammond, Personal PropertyCommentary and Materials (1992) at p. 90 et al.

4. Cap. 224 1985 Rev Ed.

II. Documentary Intangibles

247. These are choses in action that are manifested in physical form. Docu-mentary intangibles thus have the traits both of choses in possession and choses in

246–247 Part II, Ch. 1, General Classification


action. The foremost example of this would be negotiable instruments like thecheque and bill of exchange. These instruments are really debt instruments inwhich the transfer of paper carries with it the underlying debt, a chose in action.Due to its physical manifestations, there is a tendency to reify the chose in action,so that possession of the physical form takes on a significance that does not existwith pure intangibles.1 The rules of assignment of choses in action do not, forexample, apply where negotiable instruments are concerned – such instrumentscan be transferred free of prior equities. Cheques can also clearly be converted,2

although banks are given statutory defences in the Bills of Exchange Act whenhandling such instruments.3 But at other times, even the cheque is treated not as aseparate physical entity, but only as evidence of a chose in action, so that stoppageof payment appears to also destroy the proprietary nature of the cheque itself. Inthese situations, the donor of the cheque can lawfully repossess it.4

1. Barak (1983) 18 Israel LR 49.2. The Official Assignee Of The Property Of Loh Chuk Poh v. The Oversea Chinese Bank Ltd.

[1934] MLJ 76.3. Cap. 23 1985 Rev Ed.4. JB Jeyaratnam v. Law Society [1988] 3 MLJ 425 (PC from Singapore); discussed by K

Shanmugam [1989] 1 MLJ xli, [1989] 2 MLJ lxvi; P Jeyaratnam [1989] 2 MLJ xxxiii, [1989]3 MLJ xvii.

248. The situation is even more complex with non-negotiable instruments likeshares. The giving away of possession of the share certificate (with an executedtransfer form) to a middleman can give rise to an estoppel against the true owner.The owner’s interest would be subordinated to a third part if his action causes athird party to believe that the middleman has the authority or title to transfer theshares.1 Yet it has been held that it would be extremely unusual to obtain a pledgeof the paper relating to shares, since security over the underlying chose should bein the form of a mortgage or charge.2

1. Pan-Electric Industries Ltd. v. Overseas-Chinese Banking Corp. Ltd. [1994] 3 SLR 695.2. Chase Manhattan Bank v. Wong [1993] 1 SLR 1; but see McCracken (1993) 4 Journal of

Finance Law & Practice 232.

§3. Funds

I. Money

249. Money is used as a unit of account, store of value and a medium ofexchange. The latter role is, however, predominant. For this reason, although it istreated as a chattel, possessory actions such as conversion cannot generally bebrought unless money is set aside, for example, in a bag. This is because title tomoney passes readily due to its highly negotiable nature, so that the relationshipcreated between the transferor and transferee is generally one of mutuum or loan,rather than bailment, which would normally require that the money not be mixedwith the transferee’s other assets and returned in specie at the end of the bail-ment.1 Consequently, improperly transferred money is normally recovered through

General Classification, Part II, Ch. 1 248–249


restitutionary actions.2 However, personal actions may not suffice in an insolvency.In these situations, it is vital to establish a proprietary claim, which in equityrequires a fiduciary relationship and probably an equitable proprietary interest.3

1. But see Mercer v. Craven Grain Storage Ltd. [1994] CLC 328; Bridge, Personal Property Law(2nd ed, 1996) at p. 31.

2. Lipkin Gorman v. Karpnale [1991] 2 AC 548.3. FC Jones v. Jones [1996] 3 WLR 703, Hongkong & Shanghai Bank v. UOB [1992] 2 SLR 495.

II. Mixed Funds or Assets

250. Outside the traditional banker-depositor relationship, however, the inten-tion of the transferor may be to retain ownership in the transferred funds or assetspurchased from those funds. This is manifested in the requirement that the trans-feree keep the funds separate from his own. However, the fungible nature of moneyand difficulty with identification means that the pooling of funds, say, for thepurposes of investment, often create problems of ascertainability and co-ownership.Even if the transferor retains a proprietary interest in the fund, it is clear that noindividual fund-holder can segregate its share from the rest of the fund. The moredifficult question is whether that individual holder in fact shares the fund in com-mon with the other fund-holders or whether the fund-holder only has a contractualright to a share which does not survive an insolvency. As the law stands, it isgenerally easier to retain a property right than to create a new right in a pool ofassets. The former is assisted by the laws of tracing, particularly the presumptionsof equity.1 The latter is hampered by the requirement that property be identifiablebefore title to it can pass.2 Consequently, there has to be an unequivocal appropriationat some point in time before a proprietary interest can be created in a mixed fund.

1. See para. 310; Re Hallett’s Estate (1880) 30 Ch D 696; Hongkong & Shanghai v. UOB, ibid.2. Re Goldcorp Exchange Ltd. [1995] 1 AC 74.

251. Where a fund consists not of tangible assets but extremely fungible formsof choses in action like shares, however, it may be easier for property to pass eventhough the shares are not specifically appropriated to the individual owners. Rightsof co-ownership are quite readily created in these situations,1 although the positionin Australia seems to be that such rights cannot be created without specific appro-priation.2 The courts in Singapore are likely to adopt the English position, particu-larly since, under certain circumstances, statute now also recognizes co-ownershiprights in a bulk of tangible property.3

1. Hunter v. Moss [1994] 1 WLR 452.2. In re Harvard Securities Ltd. (in liq), The Times, 19 July 1997.3. Sale of Goods (Amendment) Act 1996, adopting the 1995 English amendments.

§4. Chattels Real

252. The only recognized chattel real is the leasehold interest, which is pro-tected by a personal not a real action. However, for practical purposes, the action

250–252 Part II, Ch. 1, General Classification


of ejectment, which has roots in trespass, is in effect an action for the recovery ofland and has the traits of a real action. Further, the Limitation Act1 does not includechattels real in its definition of ‘personal estate’ although the Wills Act2 does. Allother chattels are chattels personal, i.e., choses in possession and choses in action.

1. Cap. 163 1985 Rev Ed.2. Cap. 352 1985 Rev Ed.

General Classification, Part II, Ch. 1 252


Chapter 2. Legal Interests

§1. Ownership and Possession

253. The common law recognizes only two interests in personal property:ownership and possession. However, ownership in Anglo-American law is not akinto its civilian counterpart; it is simply the best or highest form of possessionavailable. Ownership is the ‘greatest possible interest in a thing which a maturesystem of law recognizes’.1 It therefore follows that possession is by its naturerelative, so that someone in possession, even if not the real owner, can maintain anaction for conversion or negligence against a wrongdoer, and anyone claimingunder him. ‘The English law of ownership and possession, unlike that of Romanlaw, is not a system of identifyng absolute entitlement, but of priority of entitle-ment’.2 So it is in Singapore. Thus, the person with possessory title can assert thattitle against the whole world except the true owner, and the defence of jus tertiiseldom succeeds.3 The old doctrine of reputed ownership also bears this out, al-though this doctrine only exists in older legislation like Section 12 of the DistressAct;4 and Sections 7 and 8 of the Land Improvement Act.5

1. Honore, ‘Ownership’ in Oxford Essays in Jurisprudence (ed. Guest, 1961).2. Waverley Borough Council v. Fletcher [1996] QB 334, at p. 345.3. The Official Assignee Of The Property Of Loh Chuk Poh v. The Oversea Chinese Bank Limited

[1934] MLJ 76.4. Cap. 84 1985 Rev Ed.5. Cap. 153 1985 Rev Ed.

§2. Sanctity of Legal Interests

254. Legal interests are said to bind the world and no one is able to transfer abetter title than he has: nemo dat quad no habet. This is, however, subject to thestatutory exceptions found in the Sale of Goods Act,1 some of which, like themarket overt rule, originated in the lex mercatoria. Consequently, legal interests inpersonal property, though secure, are not completely so. For example, Section 25of the Sale of Goods Act provides that a buyer in possession of goods may be ableto transfer a better title than he himself possesses, although this would not alter thefact that the buyer has converted the goods:

25. Where a person having bought or agreed to buy goods obtains, with theconsent of the seller, possession of the goods or the documents of title to thegoods, the delivery or transfer by that person, or by a mercantile agent actingfor him, of the goods or documents of title, under any sale, pledge, or otherdisposition thereof, to any person receiving the same in good faith and withoutnotice of any lien or other right of the original seller in respect of the goods,has the same effect as if the person making the delivery or transfer were amercantile agent in possession of the goods or documents of title with theconsent of the owner.

253–254


It is largely for this reason that hire purchase agreements are structured in such away that the hirer will not be deemed to be a buyer in possession. Instead, thefiction of hiring is created, with the hirer given the option to purchase the hiredgoods at the end of the hiring agreement for a nominal sum.2 Prior to the finalpurchase, a relationship of bailment is created, with the finance company remainingthe bailor-owner.

1. Cap. 393 1994 Rev Ed.2. Helby v. Matthews [1895] AC 471.

§3. Special Property

255. Ownership is often aligned with the proprietary right in general property.Section 61 of the Sale of Goods Act states that ‘ “property” means the generalproperty in goods, and not merely a special property’. Unfortunately, special pro-perty is not defined and is best seen as a property right that is carved out of therights of the owner of the general property. This would include the possessoryrights of a pledgee and lienee. The possessory rights of a pledgee,1 though not alienee, can be transferred.2

1. Donald v. Suckling (1866) LR 1 QB 585.2. Bell, Modern Law of Personal Property in England and Ireland (1989) at pp. 136–137.

§4. Bailment

256. Both the pledgee and lienee are considered bailees, since the owner orbailor has transferred away possession of the goods. One prerequisite of a bailmentis the transfer of possession to the bailee, who has to take possession voluntarily.1

At the end of the bailment, the property has to be returned to the bailor, often inspecie and unaltered, but exceptionally in an equivalent form.2 During its currency,however, the bailee’s common law possessory right is good against the owner orholder of the general property, so long as the terms of the bailment are adhered to.Generally, the bailee will also be able to sue and recover full damages for aninterference with his right of possession, even though he would have a good answerto a claim by the bailor for damages.3 But bailments also carry concurrent liabilitiesas well, and the extent of these are determined by the form of bailment. At leastsix forms were identified in Coggs v. Barnard,4 at one extreme where the bailorrewards the bailee, e.g., common carrier, for a service performed, where liabilityis strict. At the other extreme, possession is transferred purely for the benefit of thebailor, e.g., a gratuitous service, where only very serious negligence on the part ofthe bailee would give rise to liability.

1. T Kishen & Company v. Birkart South East Asia Pte. Ltd. (Civil Appeal No. 42 of 1996; 28September 1996).

2. Mercer v. Craven Grain Storage Ltd. [1994] CLC 328.3. The Winkfield [1902] P 42; QBE Insurance Ltd. v. Sim Lim Finance Ltd. [1987] 1 MLJ 657.4. (1703) 2 Ld Raym 909.

Legal Interests, Part II, Ch. 2 255–256


257. The relationship between bailor and bailee is sometimes seen as sui generis,but probably consists of a mixture of tort and contract, with the latter modifyingwhat would otherwise have been extant law. However, the burden is on the baileeto prove that loss would have occurred even without any fault on his part, when thegeneral rule is that damage must be proved by the plaintiff.1 A bailee can sub-bailthe goods to another. If the bailor consents either expressly or impliedly to the sub-bailment, all the incidents of the relationship between bailee and sub-bailee will beimplied into the relationship between bailor and sub-bailor.2

1. Port Swettenham Authority v. Sharikat Lee Heng Sdn. Bhd [1971] 1 MLJ 110; Houghland v.R R Low (Luxury Coaches) Ltd. (1962) 1 QB 694.

2. The Pioneer Container [1994] 2 AC 324; Phang (1995) 58 Modern LR 422–30.

§5. Co-ownership

258. Whereas possession in the strict legal sense can seldom be shared, co-ownership is a common occurrence. There are only two forms of co-ownershiprecognized at law: the joint tenancy and tenancy in common. The former carrieswith it the right of survivorship, so that upon the death of a joint tenant, propertywill pass automatically to the surviving joint tenant without falling into the de-ceased’s estate. Equitable interests can also be co-owned, although this would moreoften be in the form of a tenancy in common, where both parties have distinct andseveral shares that will devolve to their successors-in-title.

257–258 Part II, Ch. 2, Legal Interests


Chapter 3. Equitable Interests

259. Aside from the legal interests examined above, all other forms of proprietaryinterests reside in equity. The priority in which equitable interests take effect dependon the maxim qui prior est tempore, portior est jure, so that the interest which isthe first in time to be created prevails over a subsequent equitable interest. How-ever, this is subject to equity’s darling, viz., the purchaser of a legal estate for valuewithout notice. Such a purchaser trumps the holder of a prior equitable interest.

260. There is a whole spectrum of equitable interests, and many can existconcurrently over the same property. At one extreme is the interest of a beneficiaryunder a bare trust, where the cestui que trust enjoys all the fruits of the propertyadministered by the trustee. At the other extreme are mere equities.1 These include,for example, rights to rescind a contract arising from misrepresentation or undueinfluence. These rights bind the world except for equity’s darling and the purchaserof the equitable estate for value without notice.2 In Singapore, the interest of abeneficiary in property subject to a trust that would only be constituted on comple-tion of the administration of an estate has been considered to be such an interest.3

1. As opposed to personal equities, which have no proprietary effect: Meagher, Gummow &Lehane, Equity Doctrines and Remedies (3rd ed. 1992) at paras. 427–435.

2. Latec Investments Ltd. v. Hotel Terrigal Pty. Ltd. (1965) 113 CLR 265.3. Wong Moy (administratrix of the estate of Theng Chee Khim, deceased) v. Soo Ah Choy (Civil

Appeal No. 23 of 1996; 13 September 1996), but see Commissioner of Stamp Duties (Queens-land) v. Livingtone [1965] AC 694 (PC).

261. There are often contractual covenants made by a seller and a third partythat seek to burden the purchaser of personal property. In De Mattos v. Gibson,1

the English Court of Appeal suggested that such covenants would bind a purchaser.However, there is still much uncertainty about the scope of such covenants. InMalaysia, it was said, purely obiter dictum, in Tam Kam Cheong v. Stephen LeongKon Sang2 that it was an extended application of the principle in real property,where restrictive covenants which touch and concern the dominant covenant bindthird party purchasers, and as such only applied to ships (which bear a closeanalogy with land). In any case, even in England, the principle is restricted tosituations where the covenant relates to a specific item of property3 and only appliesto a grant of a negative injunction.4 It is uncertain how far the principle will beapplied in Singapore.

1. (1859) 4 De G & J 276.2. [1980] 1 MLJ 36.3. Mac-Jordan Construction Ltd. v. Brookmount Erostin Ltd. [1992] 56 Build LR 6.4. Law Debenture Trust Corp. plc. v. Ural Caspian Oil Corp. Ltd. [1993] 2 All ER 355.

259–261


262–263

Chapter 4. Security Interests

262. These are rights to look to an asset for the payment of an obligation, oftena debt. ‘A proprietary interest provided by way of security entitles the holder toresort to the property only for the purpose of satisfying some liability due to him(whether from the person providing the security or a third party) and, whatever theform of the transaction, the owner of the property retains an equity of redemptionto have the property restored to him when the liability has been discharged’.1

Consequently, the best way to think of a security interest is to see it as carved outof the absolute interest in the property. It is a right subsidiary to the primaryobligation of the debtor to personally repay the debt.

1. Morris v. Agrichemcials Ltd. [1997] 3 WLR 909.

263. Security interests exist both at law and in equity. Common law securitylike the pledge and the lien are founded on possession; title to the collateral remainswith the borrower, who gives up possession to the creditor. Legal mortgages in-volve a transfer of the legal title to the mortgagee, with the mortgagor retainingthe equity of redemption. Equitable security includes non-possessory security likecharges, equitable mortages, and equitable liens. These forms of security are sub-ject to the doctrine of equity’s darling, i.e., the purchaser of a legal interest forvalue without notice takes free of prior equitable security. Due to their lack oftransparency, non-possessory forms of security often have to be registered, in thecase of individuals, under the Bills of Sale Act,1 and in the case of companies,under the Companies Act.2 Attempts are often made to obviate the need for regis-tration by structuring a transaction such that it does not appear to have the char-acteristics of security. The position in Singapore appears to be that this will normallysucceed if sufficient care is taken in the drafting of the security document.3 In otherwords, courts will not look beyond the intentions of the parties as expressed in thedocument when deciding whether any or what form of security has been created.

1. Cap. 24 1985 Rev Ed.2. Cap. 50 1994 Rev Ed.3. Thai Chee Ken v. Banque Paribas [1993] 2 SLR 609 (sale and repurchase agreement did not

create a charge).


Part III. Acquisition of Property Rights

Chapter 1. Transfer of Property by Contract Inter Vivos

§1. Importance of Ownership

264. It is often crucial to determine where the right to property lies. This isespecially so in insolvency situations since the trustee in bankruptcy or officialassignee administers only property beneficially belonging to the insolvent party.However, ownership is also sometimes important in determining who receives thebenefits of the fruits or secondary profits acquired through the use of the primaryproperty. It also determines on whom the risk of loss or damage to the property lies.Further, once property passes from seller to buyer, the former can sue the buyer forthe price of the goods, an action for a debt, and can avoid the inconvenience ofsuing for damage suffered. In England, although illegality renders a contract void,it may not reverse the conveyancing effect of that contract, where the claim can beasserted without reference to the illegal purpose.1 In Singapore, however, the Courtof Appeal in Suntoso Jacob v. Kong said that ‘(e)ven if the appellant is relying onthe resulting trust of the said shares by virtue of the transfer thereof to the respond-ent without any payment, the unlawful purpose of the transfer cannot be ignored.’2

1. Bowmakers Ltd. v. Barnet Instruments Ltd. [1945] KB 65.2. [1986] 2 MLJ 170 at p. 173. Compare Tinsley v. Milligan [1994] 1 AC 340.

§2. Land

265. The forms for the contract for the sale of land differ depending on whetherthe property sold is commercial or residential property in the course of constructionand whether they are sold by developers or by individual owners. In regard to thesale of property by owners who are not developers the applicable law for the formof the contract is governed by general law. The sale of property in the course ofconstruction by developers are governed by legislation which prescribe special stand-ard form contracts for residential developments and for commercial developments.

I. Sale by Non-developers

266. Prior to a conveyance on sale there is first a contract for the sale andpurchase of the land. In order to be valid a contract for the sale and purchase of

264–266


land has to have the three Ps, viz., the parties must be clear, the property must beclear and the price must be certain. To be enforceable a contract for the sale andpurchase of land has to be in writing, or there must be a memorandum of thecontract, signed by the party to be charged.1 Where the contract itself is not inwriting the memorandum must contain the terms agreed upon and indicate thatthe parties have agreed to those terms.2 It is common for the actual contract to bepreceded by the grant, by the vendor, of an option to purchase. Usually on theexercise of the option accompanied by the payment of 10 per cent of the purchaseprice, the contract then comes into existence.3

1. Section 6A(d) Civil Law Act Cap. 43 1994 Rev Ed.2. Ku Yu Sang v. Tay Joo Sing & Anor [1993] 3 SLR 938; Christina Lee v. Eunice Lee [1993]

3 SLR 8.3. Ng Soo Kim v. Heng Teo Bong [1993] 1 SLR 407.

267. Where there is neither a contract in writing nor a sufficient memorandumof the contract the equitable doctrine of part performance may be applicable.1 Theremay be a doubt as to the applicability of part performance under Section 6A(d)Civil Law Act as the section does not specifically retain the doctrine as does theformer Section 40 Law of Property Act 1925 England to which Section 6A(d) isin pari materia.2 However, there are as yet no cases on this point and in any eventthere remains the doctrine of equitable estoppel.

1. Steadman v. Steadman [1976] AC 536.2. Crown, Cutting the apron strings: The localisation of Singapore’s Land and Trust Law (1995)

SJLS 75 at pp. 77–81. In England Section 40 Law of Property Act 1925 has been amended bySection 2 Law of Property (Miscellaneous Provisions) Act 1989.

268. The contract may be conditional, e.g., subject to satisfactory replies, or sub-ject to approval of a third party being given. In this case the parties are in contractbut the contract becomes enforceable only when the condition is fulfilled.1 Wherethe condition is not satisfied the parties are left to their remedies as set out in thecontract.2

1. Ong Bok Realty Pte. Ltd. v. Chian Hong (Pte.) Ltd. [1987] 2 MLJ 37; Selvadurai Pala Krishnanv. Francis Adrian & Co Pte. Ltd. [1985] 2 MLJ 182; Chi Lung Holdings Sdn. Bhd. v. AttorneyGeneral [1994] 2 SLR 354.

2. Chye Seng Huat Construction Pte. Ltd. v. Goh Chin Soon [1991] 1 MLJ 1077.

269. Once there is a binding contract for the sale and purchase the equitableinterest passes to the purchaser leaving the vendor with the title as constructivetrustee.1 Property can be said to pass when there is a binding contract. This is theposition unless the contract is a conditional one. The purchaser bears the risk of theproperty being damaged.2 However, where the circumstances so justify, viz., ‘whenwithout default of either party, a contractual obligation has become incapable ofbeing performed because the circumstances in which performance is called forwould render it a thing radically different from that which was undertaken by thecontract . . .’ the doctrine of frustration of contract can apply.3 This doctrine was

267–269 Part III, Ch. 1, Transfer of Property by Contract Inter Vivos


applied to a case where the land contracted to be sold was made subject to com-pulsory acquisition before the conveyance was completed.4

1. Lysaght v. Edwards (1876) 2 Ch D 499; Christina Lee v. Eunice Lee [1993] 2 SLR 8; Lim KimSom v. Sheriffa Taibah bte Abdul Rahman Alsagoff [1994] 1 SLR 393.

2. Rayner v. Preston (1881) 21 Ch D 1 and Section 3(13) Conveyancing and Law of Property Act.3. Davis Contractors Ltd. v. Fareham District Council [1956] AC 696.4. Lim Kim Som v. Sheriffa Taibah bte Abdul Rahman Alsagoff [1994] 1 SLR 393.

270. Where the parties enter into a contract with only the parties, price andproperty ascertained, they have an open contract and the terms as set out in Section3 Conveyancing and Law of Property Act apply. These provide for the rights andobligations of the parties as to title, e.g., a purchaser shall not be entitled to requiretitle to be deduced for more than fifteen years. The Law Society has also a set ofstandardized conditions of sale which parties may incorporate into their contract.1

On completion date the vendor transfers the title to the purchaser on receipt of thebalance of the purchase price.

1. The Law Society Conditions of Sale.

II. Sale of Units by Developers in Developments for Residential andCommercial Purposes

271. The practice in regard to the sale of units by developers in a developmentwhether for residential or commercial purposes, is for the developer to offer theunits for sale even before the building is constructed. Potential purchasers enter intocontracts to buy simply on the strength of plans and ‘mock ups’ of units. Purchaserspay in instalments as the construction of the building progresses and the last instal-ment is paid only on completion date. Purchasers thus need to be protected fromdevelopers who may not be able to complete the projects. Another not uncommonfeature is that when the building is ready and the actual demarcation of the sub-division of the units are done the area that was agreed to be bought may be differentfrom that which is actually transferred on completion. Thus to ensure that purchas-ers are adequately protected legislation was enacted to govern the sale of units inresidential and commercial developments.

A. Residential Developments

272. The Housing Developers (Control and Licensing) Act1 govern the devel-opment of housing for residential purposes. Under this Act housing developersmust be licensed before they can carry on the business of housing development.This is defined as the business of developing or financing the development of morethan four units of ‘housing accommodation’, which in turn is a building constructedand intended for human habitation or human habitation and business purposes.

1. Cap. 130 1985 Rev Ed.

Transfer of Property by Contract Inter Vivos, Part III, Ch. 1 270–272


273. Option agreements and contracts for sale of units in a ‘housing develop-ment’ must be in the forms prescribed in the Act.1 Variations to the prescribed arepermitted only with the prior consent of the authorities. The prescribed formsregulate closely the rights and duties of both purchaser and developer includingsetting out a schedule for payments of instalments.

1. The prescribed forms are set out in the Housing Developers Rules Cap. 130 R1 1990 Ed. asamended by Housing Developers (Amendment) Rules 1997.

274. The transaction is completed when the developer transfers the strata titlethat is issued to him to the purchaser. This should take place at the latest three yearsfrom the time of the delivery of vacant possession of the unit. Should the area ofthe unit transferred be larger than that agreed to be sold the vendor may not adjustthe price although should the area be less than that agreed to be sold by more than3 per cent the purchaser is entitled to an adjustment of the price for deficiencywhich exceeds 3 per cent.

B. Commercial Developments

275. The sale of commercial properties where the building is not completed orwhere the certificate of fitness has not been given, is governed by the Sale ofCommercial Properties Act.1 For the purposes of the Act ‘commercial property’refers to a unit in a building (where there are more than four units) which are usedfor a purpose other than a residential purpose. The Act provides for a standardform contract for sale and purchase as well as for the option that precedes thecontract. They are on lines similar to that prescribed for residential housing devel-opments. The object of the terms in the standard form contract is to protect thepurchaser hence no variation is permitted except with the prior consent of theauthorities.2 However, where the prescribed form leaves a blank to be filled in bythe parties, e.g., the date for completion, a subsequent variation, without the per-mission of the authorities, of the date earlier filled in is not regarded as a variationof the form.3

1. Cap. 281 1985 Rev Ed.2. Sale of Commercial Properties Rules Cap. 281 R 1 1990 Ed. as amended by Sale of Commercial

Properties (Amendment) Rules 1997.3. Mun Hean Realty Pte. Ltd. v. Fu Loong Lithographer Pte. Ltd. [1993] 1 SLR 713.

276. The standard form of the contracts under both the Housing Developers(Control and licensing) Act and the Sale of Commercial Property Act provide forthe remedies available to a vendor in the event of breach are set out in the regu-lations. It has been held in Excelsior Hotel Pte. Ltd. v. Hiap Bee (Singapore) Pte.Ltd.1 that this does not oust the remedies available at general law. Thus althoughthe prescribed remedy is damages the vendor may sue for specific performance.

1. [1990] 2 MLJ 211.



§3. Tangible Property: Chattels

I. General

277. The transfer of intangibles will be dealt with in the section on assignmentsof choses in action. Our concern here is with the consensual transfer of tangibleproperty pursuant to a contract, i.e., where consideration for the promise to transferis furnished. The relevant rules are found in the Sale of Goods Act.1 Section 17(1)of that Act states that: ‘Where there is a contract for the sale of specific or ascer-tained goods, the property in them is transferred to the buyer at such time as theparties to the contract intend it to be transferred.’ Delivery is thus unnecessarywhere the parties intend that the property in specific or ascertained goods is trans-ferred prior to that time.

1. Cap. 393 1994 Rev Ed.

II. Specific Goods

278. Section 61 of the Act defines ‘specific goods’ as ‘goods identified andagreed on at the time a contract of sale is made and includes an undivided share,specified as a fraction or percentage, of goods identified and agreed on as afore-said’. Where goods are specified, the passing of property depends on the intentionof the parties. To discern those intentions, a series of presumptions are provided bySection 18 of the Act:

Rule 1. – Where there is an unconditional contract for the sale of specificgoods in a deliverable state, the property in the goods passes to the buyerwhen the contract is made, and it is immaterial whether the time of paymentor the time of delivery, or both, be postponed.

279. The rule can appear to be harsh on the seller of the goods, but this ismitigated by the fact that the seller retains an unpaid seller’s lien by virtue ofSection 41 of the Act. Again, the rule is only a presumption, and can be overcomeby evidence of the parties’ intentions. For example, the insertion of a retention oftitle or Romalpa clause1 would show that the parties agree that the seller retains titleto the goods until payment is made. However, the parties’ intentions must bepossible of fulfilment, thus Romalpa clauses may not work if drafted so widely asto include title to new or transformed goods resulting from the seller’s originalgoods. Section 19 statutorily preserves the seller’s right to dispose of the goods,particularly in international trade situations, where the bill of lading states that thegoods are deliverable to the order of the seller or his agent. As will be seen later,the bill of lading is a document of title to goods contained on the ship, and repre-sents the underlying goods. A further caveat to Rule 1 is provided by Rules 2 and3 of the same section, i.e., the contract may require the seller to put the goods ina deliverable state or to weigh, measure and test the goods for the purpose of

Transfer of Property by Contract Inter Vivos, Part III, Ch. 1 277–279


ascertaining the price. The seller would then have to comply with these require-ments and notify the buyer before Rule 1 can operate.

1. [1976] 1 WLR 676, see below at para. 379.

III. Unascertained Goods

280. Unascertained goods are not defined, and include an undifferentiated portionof an identified bulk of goods. Section 16 states that property in unascertainedgoods cannot pass until they have become ascertained. However, an exception tothis rule is now provided by the Sale of Goods Amendment Act 19961 in caseswhere a stated portion of undivided property is sold in an identified bulk. In suchinstances, the buyer becomes the co-owner of the bulk to the extent of his propor-tionate share in that bulk. This amendment meets the needs of traders dealing withbulk cargos in international trade.

1. Following the 1995 UK amendments.

281. In all other cases, Section 18 Rule 5(1) requires the goods to be uncon-ditionally appropriated to the contract by the seller or buyer, with the assent of theother. Assent is often identified from the acts of the parties, e.g., buyer handingover a container to the seller for the latter to load the purchased goods.1 Therequirement of unconditional appropriation usually means that the goods have beenunequivocally set aside and identified,2 although the doctrine of exhaustion is ofsome assistance here, i.e., if the remaining residue after other orders are met coin-cides with the buyers’ share.3

1. Aldridge v. Johnson (1857) 7 E & B 885.2. Carlos Federspiel v. Twigg [1957] 1 Lloyds Rep 240.3. The Elafi [1982] 1 All ER 208, Section 18 Rule 5(3) and (4).



Chapter 2. Transfer of Property by Death

§1. Law Applicable to Adherents of the Muslim Faith

282. The Administration of Muslim Law Act1 applies to adherents of the Muslimfaith and the distribution of property on the death is governed by Part VII of thatAct. Section 111 states that not withstanding any other written law no Muslimdomiciled in Singapore shall dispose of his property on death except in accordancewith the provisions of the school of Muslim law professed by him. Where a Muslimperson dies intestate domiciled in Singapore his estate and effects shall be distrib-uted in accordance with Muslim as modified where applicable by Malay custom.2

1. Cap. 3 1985 Rev Ed.2. Section 112 Administration of Muslim Law Act Cap. 3 1985 Rev Ed.

283. The money in the Central Provident Fund to which a Muslim person isentitled does not form part of his estate under the Administration of Muslim LawAct. Accordingly where he has, in his lifetime, made a nomination under the Cen-tral Provident Fund Act,1 his nominee will be beneficially entitled to the money.2

1. Section 25 Central Provident Fund Act Cap. 36 1997 Rev Ed.2. Saniah bte Ali v. Abdullah Bin Ali [1990] 3 MLJ 135. See also B. Crown, ‘Death and the Central

Provident Fund’ [1991] 1 MLJ cxiv.

§2. In General

I. By Will

284. Except in regard to persons of the Muslim faith, there is freedom of testa-tion in Singapore subject only to the limited control under the Inheritance (FamilyProvisions) Act.1 The owner of any interest in any property, of sound mind, maydispose of his interest under a valid will. The will must be executed in accordancewith the Wills Act2 which requires that the will be in writing, signed by the testatorin the presence of two witnesses who must acknowledge his signature in his pre-sence. Further the testator must have a disposing mind and memory at the time thewill is made.3

1. Cap. 138 1985 Rev Ed.2. Cap. 352 1985 Rev Ed.3. Bankes v. Goodfellow (1870) LR 5 QB 549 at p. 565.

II. Intestate Succession

285. Where a person domiciled in Singapore dies without leaving a valid willall his property movable and immovable will be distributed in accordance with

282–285


Section 7 Intestate Succession Act.1 The Act also applies to immovable property inSingapore of any person who is not domiciled in Singapore at the time of death.2

The rules in Section 7 provide for the different classes of next of kin of thedeceased who shall be entitled to his estate. In the absence of any next of kin therules provide for the State to be entitled.

1. Cap. 146 1985 Rev Ed.2. Section 5 Intestate Succession Act.

III. By Nomination

286. The money to which a member of the Central Provident Fund is entitledis deemed to be not part of his estate when he dies and is not be subject to his debtsexcept estate duty payment.1 Under Section 25 Central Provident Fund Act a memberof the Fund may, in his lifetime, make a nomination in regard to the money in theFund to which he is entitled. Any number of nominations may be made so long asthe provisions of the Act are complied with. The last valid nomination will be theoperative one on his death. The money is deemed to be impressed with a trust infavour of the person nominated.2 Where the member does not make a valid nomi-nation in his lifetime, on his death the money to which he is entitled will be paidto the Official Assignee who will dispose of it in accordance with the written lawin force.3 Although under Section 24(3) the money is deemed not to form part ofthe deceased member’s estate in practice the Official Assignee pays such moneyreceived to the persons entitled to his property under his will if there is one or tothose entitled as on intestacy where he died without a valid will.4

1. Section 24(3) Central Provident Fund Act.2. Ibid.3. Section 25(2) Central Provident Fund Act.4. See B. Crown, ‘Death and the Central Provident Fund’ [1991] 1 MLJ cxiv.

IV. Right of Survivorship

287. Where property is held by two persons as joint tenants, unless the jointtenancy has been severed in the lifetime of a joint tenant, on the death of one ofthe joint tenants the survivor becomes to the entire interest as the sole owner. Ajoint tenant may not dispose of his interest in property which he holds in a jointtenancy, by will. Where there are more than two joint tenants the surviving jointtenants remain as joint tenants of the property.1,2

1. See above Part 1 Chap 6.2. Section 37(1) Probate and Administration of Estates Act Cap. 251, 1985 Rev Ed.

V. Donatio Mortis Causa

288. While this is not strictly a transfer of property by death, it is a transferon death. It only applies to personal property, including intangibles which are

286–288 Part III, Ch. 2, Transfer of Property by Death


represented in a physical form, e.g., bank deposit books. This is because a validdonatio mortis causa requires delivery of the subject matter of the gift during thedonor’s lifetime, although a constructive delivery suffices. A gift of land made incontemplation of death can also be perfected by the delivery of title deeds by wayof a trust arising by operation of law.1

1. Sen v. Headley [1991] 2 All ER 636.

289. However, the donor only intends for the gift to take effect on his death –the gift is in contemplation of death. In a sense, donatio mortis causa is an excep-tion to both the form of transfer by inter vivos gift (which as we will see requiresan intention to make a present and complete gift)1 as well as by way of a will(which requires compliance with the requirements of the Wills Act). If, however,the donor does not die, the donatio mortis causa does not take effect, so that thedonee will hold the property for the donor on a form of bailment.

1. This is the preferred view: In the Matter of Order 17 Rules 1(1)(a) and 3(1) of the Rules of theSupreme Court (Originating Summons No. 811 of 1994, 20 January 1998).

§3. Personal Representatives

I. Executors

290. On the death of a person leaving a valid will where he has appointedexecutors, such executors may apply for the grant of probate.1 Probate shall not begranted to more than four persons.2 A person appointed executor may renounce theappointment.3 Where an executor dies before the estate is fully administered therepresentation of the estate shall accrue to the surviving executor. Where the soleexecutor dies before the estate has been fully administered, leaving a will in whichhe has appointed executors his executors shall be executors of the estate that thedeceased was administering. This chain of representation is broken only where thelast executor dies intestate.4 In such circumstances letters of administration de bonisnon will have to be appointed for the original testator.5

1. Section 8 Probate and Administration Act Cap. 251 1985 Rev Ed.2. Section 6 Probate and Administration Act.3. Section 3 Probate and Administration Act.4. Section 16A Civil law Act Cap. 43 1994 Rev Ed., Syed Ali Redha Alsagoff v. Syed Salim

Alhadad [1996] 3 SLR 415 at p. 420.5. Section 16A Civil law Act.

II. Administrators

291. Where the deceased died without appointing executors in a valid will orwhere he died intestate, until the appointment of administrators, the estate of thedeceased vests in the Chief Justice.1 Letters of administration may be granted to thespouse or next of kin of the deceased. Where no such person applies any creditor

Transfer of Property by Death, Part III, Ch. 2 289–291


of the deceased may apply for letters of administration.2 Where an administratordies before the estate is fully administered the representation of the estate accruesto the surviving administrators. On the death of the last surviving administrator, anadministrator de bonis non must be appointed for the estate of the original deceased.Unlike the case of the last surviving executor there is no automatic passing of theadministration to the second administrator.3

1. Section 37 Probate and Administration Act.2. Section 18 Probate and Administration Act.3. Syed Ali Redha Alsagoff v. Syed Salim Alhadad [1996] 3 SLR 415 at p. 420.

III. Estate Duty

292. Estate duty has to be paid on the passing of all property to which thedeceased was beneficially entitled.1 Estate duty is a first charge on the estate andmust be paid before any grant of any representation shall be issued by any court.2

After the estate duty has been paid the personal representatives may proceed withthe administration of the estate. Any one personal representative may deal with theestate and give a valid receipt, except in regard to the sale of land where the receiptmust be given by at least two personal representatives.3 An order of court must beobtained before any part of the estate be mortgaged or sold after six years from thedate of death unless the mortgage or sale is authorized by the will.4 In regard toland governed by the Land Titles Act the executors must register the transmissionof the land to them prior to their effecting any dealings.5

1. Sections 6–14 Estate Duty Act Cap. 96 1985 Rev Ed. Exceptions to liability to estate duty aregifts made for at least five years, or in the case of a gift to a charity at least one year, prior todeath.

2. Sections 29 & 42, Estate Duty Act.3. Section 18 Trustees Act Cap. 337 1985 Rev Ed.4. Section 35(2) Conveyancing and Law of Property Act Cap. 61 1994 Rev Ed. Syed Ali Redha

Alsagoff v. S.S. Alhadad [1996] 3 SLR 410, United Overseas Finance Ltd. v. Sakayamary[1997] 3 SLR 211.

5. Section 107 Land Titles Act Cap. 157 1994 Rev Ed.

292 Part III, Ch. 2, Transfer of Property by Death


Chapter 3. Possession

§1. General

293. There is very little land that is res nullius today, so acquisition by posses-sion where land is concerned refers to acquisition by adverse possession. Prior to1994 Section 9 of the Limitation Act1 provided that no action can be brought torecover any land after a period of twelve years from the time the cause of actionaccrued. The cause of action accrued from the time the owner was dispossessed bythe adverse owner. ‘Adverse’ in this context meant that the possession must not begiven with the consent, express or implied, of the paper owner. However, Section177 of the Land Titles Act2 now provides that in the context of registered land, notitle can be acquired by adverse possession (see above under Possession and Title).There is more scope for the acquisition of property rights by way of possessionwhere personal property is concerned. Possession, however, is a relative concept.It depends on both the fact of possession and the animus or intention to possess.The common law generally recognizes that it is more difficult to acquire an interestthan to maintain it. This is in order to protect the sanctity of prior possession. Forexample, it is extremely difficult, if not impossible, to acquire an interest in com-mingled property. There are, however, rules to trace property already owned, intosuch property.3 So it is with possession. Much would also depend on the nature ofthe property one is seeking to possess. Conversely, possession is lost only if thereis both the animus and factum of abandonment.

1. Cap. 163 1985 Rev Ed.2. Cap. 157 1993 Ed.3. See below at para. 310.

§2. Constructive Possession

294. This is sometimes confused with symbolic possession, which occurs when,for example, an item is delivered that is intended to symbolize delivery of thewhole. Things are in constructive possession when they are held by one’s agent orbailee. To effect a delivery of property held by a third party, such as a warehouse-man, the latter’s attornment is necessary to show that he is now holding the prop-erty as agent or bailee for the buyer. This would be needed in cases where deliveryorders or warrants are given by the seller to the buyer. However, where the docu-ment has acquired the status of a negotiable instrument, such as a bill of lading,negotiation of such a bill will automatically serve as constructive delivery of theunderlying property.1 Again, while there has to be delivery by the seller and accept-ance by the buyer before possession is effectively transferred, this can occur with-out physical delivery if the nature of the seller’s possession changes to that of anagent or bailee of the buyer.

1. Lickbarrow v. Mason (1787) 2 TR 63. In Singapore and Malaysia, mates’ receipts are by customtreated like bills of lading: Chan Cheng Kum v. Wah Tat Bank Ltd. [1971] 1 MLJ 177.

293–294


§3. Finding

295. Where ownership has not been abandoned, but only possession, a finderwho takes possession acquires a right which is subordinate only to that of the trueowner. The finder is treated like a bailee, and is expected to respect the title of thetrue owner, the fictitious bailor. In addition, the finder is expected to search forthe true owner.1

1. Parker v. British Airways Board [1982] QB 1004; Daniel S/O D William v. Luhat Wan [1990]2 MLJ 48.

295 Part III, Ch. 3, Possession


Part IV. Trust and Fiduciary Mechanism

Chapter 1. Administration of Property/Trusts

§1. General

310. Equitable interests were examined in Part II above. Our concern here iswith a particular equitable interest, that arising under a trust. Trust interests canarise through the express arrangement of settlor, trustee (who could also be thesettlor in the case of a self-declared trust) and beneficiary (although strictly speak-ing the latter need not consent to it1). The trust device allows management respon-sibility to be vested in the trustee while beneficial enjoyment of the property resideswith the cestui que trust or beneficiary. The duties imposed on an express trusteeare extremely onerous, and may include the duty to invest the trust property, tokeep proper accounts, and the like. Although trustees may delegate some of theirpowers to co-trustees or agents, they remain under a duty to supervise the co-trusteeor agent. Upon a breach of duty, the trustee is generally required to restore the trustto its pre-breach position. Under Section 63 of the Trustees Act,2 however, a courtmay be able to relieve a trustee from the consequences of a breach of trust ifconvinced that the trustee had acted honestly and reasonably, and ought reasonablyto be excused from liability.

1. Standing v. Bowring (1885) 31 Ch D 282.2. Cap. 337 1985 Rev Ed.

311. Alternatively, trust interests can arise by operation of law, so called con-structive trusts. In this context care has to be taken not to confuse what are trueconstructive trusts with the in personam liability of certain wrongdoers to compen-sate the trust or restore trust property like a trustee mismanaging a trust. Trueequitable interests can subsist even in commingled property. In equity, this requiresthe existence of a fiduciary relationship and the continued identification of property.There the latter is concerned, equity presumes that a trustee acts honestly and con-sequently dissipates his own share of the mixed fund rather than the beneficiaries.1

Even the true constructive trust, however, does not impose the same strict manage-ment duties that exist with the express trustee.

1. Re Hallett’s Estate (1880) 30 Ch D 696; Hongkong & Shanghai Bank v. UOB [1992] 2 SLR495.

310–311


§2. Resulting Trust

312. Somewhere between the express and constructive trust lies the resultingtrust, which is presumed in cases of a gratuitous transfer of property from one partyto another. Unless there is an express declaration of trust or agreement, the benefi-cial interest will generally belong to the parties in the proportion in which theyprovided the purchase money towards the acquisition of property. This is the caseeven if the property is put in joint names at law, as this is presumed to be the realbut unexpressed intention of the payer.1 The law is somewhat complicated heresince the presumption of resulting trust can sometimes be countered by the pre-sumption of advancement, where a man puts property in the name of his wife orchild.2 However, the modern trend is to discern the parties’ intentions from thesurrounding evidence, rather than to rely on these presumptions.3

1. Chia Kum Fatt v. Lim Lay Choo [1993] 3 SLR 833.2. In Australia, the presumption can apply gifts by the mother to a child: Nelson v. Nelson (1995)

184 CLR 538.3. Neo Tai Kim v. Foo Stie Wah [1985] 1 MLJ 397 (PC from Singapore).

313. In cases of vitiated agreements to transfer property, a resulting trust couldalso arise when the contract is set aside and the recipient is found to have actedunconscionably.1 It has, however, been held in Singapore that money paid pursuantto a fraudulent misrepresentation is automatically held on trust,2 and that a commonand mutual mistake in a land transaction could prevent title to the property frompassing.3 The resulting trust can also arise automatically, where there is a gap inbeneficial ownership. This is one way of explaining the secondary trust in BarclaysBank v. Quistclose Investment,4 where money lent for a particular purpose was heldon trust for the creditor when the purpose failed. When this happens the propertyis extracted from the estate of the borrower for the benefit of the creditor. It shouldbe noted, however, that it will often not be easy to impress money with a purposeor a trust. The purpose has to be clearly defined and sufficiently certain.5

1. Westdeutsche Landesbank Girozentrale v. Islington London Borough Council [1996] 2 WLR802 (HL); Tjio [1996] SJLS 608.

2. Standard Chartered Bank v. Sin Chong Hua [1995] 3 SLR 863.3. Or Chor Seng v. Tjinta Pte. Ltd. (in liq) [1995] 1 SLR 48.4. [1970] AC 567.5. Ramnani v. Vaswani [1994] 2 SLR 740.

§3. Express Trusts

314. An express trust is created when the following conditions are satisfied: (a)formalities for its creation; (b) certainty of intention, subject matter and objects(i.e., beneficiaries); (c) proper constitution or transfer of the trust property to thetrustees. Section 6B(1) of the Civil Law Act1 requires a declaration of trust involv-ing land to be evidenced in writing. The writing has to be provided by the personable to declare the trust, but want of writing only makes the trust unenforceable,not void. While not strictly relevant to the declaration of a trust, Section 6B(2)

312–314 Part IV, Ch. 1, Administration of Property/Trusts


requires all dispositions of an equitable interest to be in writing. This would applyto a beneficiary seeking to transfer its interest under a trust, and perhaps even toa declaration of a sub-trust by the beneficiary.2 Section 6B(3) provides that Sub-Sections (1) and (2) do not apply to the creation or operation of resulting, impliedor constructive trusts.

1. Cap. 43 1994 Rev Ed.2. Green (1984) Modern LR 385.

I. Certainty

315. For a trust to be validly created, the settlor must manifest the intention soto do. Mere precatory words of hope are not enough. The intention must be tocreate a present irrevocable trust in the beneficiary’s favour.

316. The subject matter of the trust has also to be certain, since the generalrule is that property can only pass, here to the trustee to hold for the beneficiary,when the property is ascertained. We have seen, however, that the requirement ofascertainability may be less stringent in the case of certain choses in action likeshares,1 so that the declaration of trust over part of a pool of shares is sufficientlycertain for the trust to be validly created, without the need for segregation of thatpart from the rest of the pool. A trust of the residuary estate is sufficiently certain.

1. Hunter v. Moss [1994] 1 WLR 452.

317. The objects or beneficiaries of the trust also have to be sufficiently certainin order for trustees to carry out their duties, unless the trust is considered chari-table. A charitable trust has to be for one of the following purposes: relief ofpoverty, advancement of education or religion, or for other purposes beneficial tothe community. In addition, there has to be an element of public benefit created bythe charitable trust. In the case of non-charitable fixed trusts, the trustees must beable to draw up a complete list of all the beneficiaries that are entitled to share inthe estate, since a mistake made in the case of one beneficiary will invariably affectthe shares of all the other beneficiaries. This is, however, not the case with discre-tionary trusts.

II. Discretionary Trusts

318. This is an express trust in which no individual beneficiary has a right toany particular part of the trust fund. Instead, the trustees are given the discretion,which they have to exercise, to nominate which beneficiary or beneficiaries fromwithin a class of beneficiaries would benefit. Until their discretion is exercised, theindividual beneficiary only has a right to be properly considered by the trustees.However, the trustees are under a fiduciary duty to properly consider the appoint-ment.1 Given these duties, the class of objects has to be sufficiently certain in orderfor the trustee to properly administer the trust. The test is, however, not as strict as

Administration of Property/Trusts, Part IV, Ch. 1 315–318


in the case of a fixed trust: all that is needed is for the trustee to say of any personwhether he or she is within or without the class.2 The class must not, however, beso wide as to render the trust administratively unworkable.3

1. McPhail v. Doulton [1971] AC 424.2. McPhail, followed locally in Hongkong Bank Trustee (Singapore) Ltd. v. Farrer Tan [1988] 1

MLJ 485.3. R v. District Auditor ex p. West Yorkshire Metropolitan County Council (1986) 26 RVR 24.

III. Constitution

319. A trust also has to be completely constituted, i.e., the trust property mustproperly vest in the trustee. The law of gifts is relevant here. If it is not completelyconstituted, then the trust or promise to create a trust cannot be enforced by thebeneficiary, who is but a volunteer. In the three-party situation of settlor, trusteeand beneficiary, the settlor has to do everything in his power to transfer the subjectmatter of the trust to the trustee. In the case of shares for example, the transfer formhas to be duly executed and delivered along with the share certificates, even ifregistration only occurs sometime later.1 However, the principle would not applywhere there may be a decisive intervening factor, such as the approval of a thirdparty.2 Actual formalities depend on the nature of the property; with chattels, meredelivery suffices, in the case of shares, the transfer form has to be properly ex-ecuted. In the two-party situation, no transfer is required, since the settlor is thetrustee. What is crucial is that there has to be an present irrevocable intention onthe part of the settlor/trustee to create a trust. However, the court will not find inan imperfect transfer of property to a third party trustee a self-declaration of trustby the settlor.3 In a highly exceptional situation, however, a court may find that thepromise to transfer property in itself constitutes the subject matter of a trust that isheld by the trustee on behalf of the beneficiary.4

1. Re Rose [1952] Ch 497.2. Re Lee Phee Soo (1960) 26 MLJ 75, where permission of Controller under the Finance Regu-

lations then in force to transfer the shares had not been obtained.3. Milroy v. Lord (1862) 4 De G F & J 264.4. Fletcher v. Fletcher (1844) 4 Hare 67.

319 Part IV, Ch. 1, Administration of Property/Trusts


Chapter 2. Trusts Arising by Operation of Law

§1. Constructive Trust

320. There is no single principle behind the constructive trust. Among someof the impulses behind it is the desire to prevent fraud or unconscionable conductand to reverse an unjust enrichment. Constructive trusts often arise by operationof the law, and may be imposed in spite of the intentions of the relevant parties.One difficulty with this area of law is that it was not altogether clear when theconstructive trust arises, as that would have ramifications for third parties dealingwith the constructive trustee. In Singapore, there is little indication that the courtsare willing to utilize the constructive trust as a remedy, which requires the claimantto obtain a court order before the interest crystallizes. It is generally the case thatthe constructive trust arises automatically by operation of law once the qualify-ing conditions are satisfied, which conditions will now be examined. Simply put,the court order only vindicates the pre-existing equitable interest. There are,however, some signs that courts are willing to impose the constructive trust as aremedy.1

1. Sumitumo Bank v. Kartika Ratna Thahir, The Pertamina case [1993] 1 SLR 735; Tjio [1993]SJLS 198.

I. Prevention of Fraud or Unconscionable Conduct

321. This category is frequently invoked in the context of land, particularlymatrimonial or quasi-matrimonial property. Where couples have come to a com-mon understanding that one of them will hold property on trust for both of them,and the other acts to his or her detriment in reliance on that understanding, aconstructive trust arises to protect the interest of the other. However, the basisof that common intention has to be a representation by words. Exceptionally,conduct can form the basis of this common understanding. However, it appearsthat the only relevant conduct is some form of contribution towards the purchaseof the co-owned property.1 There are signs that the common law is, however,willing to search for other forms of conduct for evidence of the common under-standing.2 In Singapore, the Women’s Charter also provides that in the case ofmatrimonial property, ‘the division between the parties of the proceeds of the saleof any such asset in such proportions as the court thinks just and equitable.’However, the relevant provisions only apply in cases of nullity, judicial separationor divorce.3

1. Lloyds v. Rosset [1991] 1 AC 107, applied in Tan Thiam Loke v. Woon Swee Kheng [1992] 1SLR 232, but where the court found that there was no detrimental reliance.

2. Midland Bank v. Cooke [1995] 4 All ER 562.3. Section 112 Women’s Charter Cap. 353 1997 Rev Ed.

320–321


322. This category includes situations where the transferor has agreed to trans-fer property to a transferee, and equity deems done that which ought to be done,so that the transferor will hold the property on trust for the transferee. However, thecontract has to be specifically enforceable or, at the minimum, consideration shouldhave been furnished by the transferee.1 This is an example of the operation of theequitable doctrine of conversion.

1. In Re Mohamed Salleh Eusoof Angullia [1941] MLJ 22, following Tailby v. Official Receiver(1888) 13 App Cas 523; cf. Worthington (1996) 11 Journal of Contract Law 1, who argues thatspecific enforceability is necessary for the doctrine of conversion to operate.

323. Constructive trusts also arise in the situation where property is transferredon the understanding that they would be held on trust for the transferor, whereuponthe transferee later seeks to renege on the understanding. This occurs most fre-quently in transactions involving land, which as we have seen requires writingbefore trusts can over it can be created. It has been held that want of writing willnot prevent the trust from arising if the formalities, which were to prevent fraud,are being used in furtherance of fraud.1 In some cases, unconscionability seems tohave been given even a wider role to play. Along with estoppel, it has been usedto create an equitable interest in future property for the benefit of a promisee, if thiswas what the promisor had represented, and where the promisee had relied uponthe promise to its detriment.2

1. Rochefoucald v. Boustead [1897] 1 Ch 196.2. Goh Swee Fang v. Tiah Juah Kim [1994] 3 SLR 881.

II. Breach of Fiduciary Duty

324. Fiduciaries owe a duty of loyalty to their principals: they are not allowedto use their office of trust to attain a profit for themselves. The law is highlydraconian, a probability of conflict suffices, and it is irrelevant whether the princi-pal could in fact have obtained the profit for itself.1 Further, the rule applies alsoto situations where a fiduciary is in a position of conflict due to multiple engage-ments.2 Trustees for example may never purchase trust property, however, fair theprice and scrupulous the mode of sale. The purchased property will be held on trustfor the beneficiary. But the category of fiduciaries extends beyond trustees to in-clude directors,3 agents,4 solicitors5 and persons that have undertaken to serve thebest interests of one clearly relying on the other’s service and good faith.6 Fiduci-aries that make a profit in breach of their duty are expected to account personallyfor the profits made. Often they may also hold the profit on constructive trust forthe principal, on the principle that equity deems done that which ought to be done,so that it would be unconscionable for the fiduciary to deny that it, for example,received the bribe on trust for the principle.7

1. Hytech Builders Pte. Ltd. v. Tan Eng Leong [1995] 2 SLR 795.2. Ohm Pacific Sdn Bhd v. Ng Hwee Cheng [1994] 2 SLR 576.3. Hytech Builders Pte. Ltd. v. Tan Eng Leong, supra.4. The Gulf Bank K.S.C. v. Yong Tai Kong (Suit 1128/1991).

322–324 Part IV, Ch. 2, Trusts Arising by Operation of Law


5. Ohm Pacific, supra.6. Sin Leng Chua v. Interfood (Suit No. 4050 of 1982), following Hospital Products Ltd. v. U.S.

Surgical Corporation (1984) 58 AJLR 587.7. The Pertamina case [1994] 3 SLR 257 (CA), following AG of Hong Kong v. Reid [1993] 3

WLR 1143 (PC).

325. While there is no general statutory defence for fiduciaries, company direc-tors are protected by Section 391 of the Companies Act which provides that adirector may be excused from a breach of duty where that director had actedhonestly and in good faith.

III. Constructive Trusteeship

326. This is not a true constructive trust situation, in the sense that a benefici-ary can claim its interest in order to obtain priority over other creditors in thetrustee’s insolvency. Instead, there is here only a personal liability on the part ofthe deemed trustee to account for a profit received, or to compensate for a losssuffered. Non-fiduciaries may, for example, obtain the proceeds of a breach of trustor fiduciary duty. If the sometime-termed stranger still has the property, it has toreturn the property, regardless of whether it knew of the breach of fiduciary duty.1

This is subject to the rules of tracing, which in equity is a powerful process.2 If,however, the property has been dissipated, there is nothing that can form the sub-ject matter of a trust. However, if it had been received in circumstances where therecipient actually knew of or had been put on inquiry regarding the breach offiduciary duty, the recipient will be liable to account for the receipt.3 Alternatively,strangers that do not receive trust property may assist in a breach of trust orfiduciary duty. In these circumstances, the stranger will be liable to compensate forany loss suffered by the trust or principal if it assisted dishonestly,4 although locallyit may be that knowledge is still a necessary ingredient before this form of second-ary liability is imposed.5

1. Yogimbikai Nagarajah v. Indian Overseas Bank [1997] 1 SLR 258.2. See para. 310.3. Yogimbikai, ibid.4. Royal Brunei Airlines Sdn Bhd v. Tan [1995] 3 MLJ 74 (PC from Brunei).5. Four Seas Construction Co. Ltd. v. D & C Bank (Suit No. 1564 of 1995).

Trusts Arising by Operation of Law, Part IV, Ch. 2 325–326


Part IV, Ch. 2, Trusts Arising by Operation of Law


Part V. Security

Chapter 1. Securities in Immovable Property

§1. Liens and Charges

327. Land may be used as security for loans in two ways, viz., the mortgageand the charge. In a mortgage, the mortgagee’s security lies in his having the titleto the land. This gives him the right to foreclose should the mortgagor default.Although in respect of land under the Land Titles Act the mortgagee does not havethe title, nevertheless he is given the right to foreclose by the statute.1 In a chargethe chargee’s security lies in the right to sell the land on default. The distinctionbetween the mortgage and the charge is today more one of form than of substance.In regard to land under the Land Titles Act the registered mortgage should be usedonly to secure debts while the registered charge is used to secure periodic pay-ments.2 Aside from mortgages and charges there are the equitable liens, e.g., thevendor’s lien and the purchaser’s lien in a transaction for the sale of land. Theseliens are imposed by Equity.

1. Sections 68(3) & 76 Land Titles Act Cap. 157 1994 Rev Ed.2. Sections 68(1) & (2) Land Titles Act.

I. Under General Law

328. In land that is not under the Land Titles Act a charge is an equitable interestwhich comes into existence ‘when property is expressly or constructively madeliable, or specially appropriated to the discharge of a debt or some other obligationand confers on the chargee a right of realization by the judicial process. . . .’1 Thereare no particular formalities for the creation of a consensual charge. All that isrequired is the intention that the property concerned is to be charged with thepayment of the debt incurred. This intention may be express or inferred. Wherethe right of sale is not expressly provided for when the chargor defaults on thestipulated date, the chargee’s remedy is to apply to court for the right to sell theproperty. Under general law the chargee should register a memorandum of thischarge in the Registry of Deeds to ensure its effectiveness against a subsequentpurchaser for value.2 Further where the charge is in the form of a deed the remediesas set out in Part IV Conveyancing and Law of Property Act, viz., the right to

327–328


insure the mortgaged property, the right to appoint a receiver when there are arrearsin interest and the right of sale are available to the chargee.3

1. Swiss Bank Corporation v. Lloyd’s Bank Ltd. [1980] 2 All ER 419 at p. 425 per Buckley LJ.2. Section 6 Registration of Deeds Act Cap. 269 1989 Rev Ed.3. Sections 2, 24–29 Conveyancing and Law of Property Act Cap. 61 1994 Rev Ed.

329. Apart from agreement the charge may also come into existence where soimposed by statute or by Equity. An example of a charge imposed by statute is thatunder Section 6(1) Property Tax Act1 where property tax remains unpaid. Examplesof charges imposed by Equity are the vendor’s lien, imposed on the property forunpaid purchase money and the purchaser’s lien is imposed to secure the interestof the purchaser.

1. Cap. 254 1985 Rev Ed.

II. Under the Land Titles Act1

330. In regard to land governed by the Land Titles Act a charge may be regis-tered under Section 68(2) to secure periodic payments. The registered chargeehas the right to enter into possession,2 as well as the rights to appoint a receiverand to sell the property.3 Aside from the registered charge informal mortgages andcharges may be effected which may not be registered. However, these equitablemortgages and charges may be protected by the caveat.4 Remedies of such chargeesrest on the contract and where none are expressly provided for then there is theright to apply to court for the right of sale.

1. Cap. 157 1994 Rev Ed.2. Section 75 Land Titles Act Cap. 157 1994 Rev Ed.3. Section 69 Land Titles Act, Part IV Conveyancing and Law of Property Act Cap. 61 1994 Rev

Ed.4. Sections 115 & 4 Land Titles Act Cap. 157 1994 Rev Ed.

§2. Mortgages

I. Under General Law

A. Formalities

331. A mortgage is created when title to land is conveyed subject to a provisoof redemption when the money loaned is repaid at a stipulated date. Where thelegal title is conveyed a legal mortgage is created. Equitable mortgages may becreated informally, e.g., by deposit of title deeds, or by deed.1 However, where theequitable mortgage is not by deed, for purposes of enforceability against subsequentpurchasers for value, registration of the memorandum of the equitable mortgage is

329–331 Part V, Ch. 1, Securities in Immovable Property


required.2 Whether the mortgage is legal or equitable the mortgagee always has theright to foreclose.

1. Under Section 24 Conveyancing and Law of Property Act, regardless of whether the mortgageis legal or equitable, if it is by deed the remedies set out in Part IV Conveyancing and Law ofProperty Act apply.

2. Section 6 Registration of Deeds Act Cap. 269 1989 Rev Ed.

B. Equity of Redemption

332. Once a mortgage always a mortgage. So terms in the mortgage whichrender the right to redeem illusory, e.g., by allowing redemption of leasehold prop-erty only at the end of the lease,1 or hamper the right to redeem, e.g., by requiringthe mortgagor to buy only the mortgagee’s products even after the mortgage hasbeen redeemed,2 are struck down as being a clog or fetter on the equity of redemp-tion. However, as mortgages are increasingly seen as arm’s length transactionsbetween parties the trend is to allow the terms of the contract to prevail unless theyare oppressive or unconscionable.3 This trend is seen in the House of Lords decisionof Krelinger v. New Patagonia Meat and Cold Storage Co. Ltd.4 More recently inCiticorp Investment Bank (S) Ltd. v. Wee Ah Kee5 the Court of Appeal reiteratedthis point.

1. Fairclough v. Swan Brewery [1912] AC 565.2. Samuel v. Jarrah Timber and Wood Paving Corp. Ltd. [1904] AC 323.3. Knightsbridge Estates Ltd. v. Byrne [1939] 1 Ch 441; Fiscal Consultants Pte. Ltd. v. Asia

Commercial Finance Ltd. [1981] 2 MLJ 64.4. [1914] AC 25.5. [1997] 2 SLR 759.

C. Mortgagee’s Remedies

333. From the point of the mortgagee his security lies in the remedies availablewhen the mortgagor defaults. The inherent right of the mortgagee is the right toforeclose. But the courts scrutinize closely the exercise of this right giving themortgagor and all persons who are interested in the equity of redemption the rightto ask for a sale in lieu of foreclosure. Moreover, should the mortgagee sue on thedebt after foreclosure, he reopens the mortgage and the mortgagor may once againredeem the mortgage.

334. Aside from the inherent right of foreclosure and what may be expresslyprovided for in the mortgage all mortgagees where the mortgage is by deed havethe remedies set out in the Conveyancing and Property Act. Thus the mortgagee hasthe right to insure the property mortgaged,1 to lease it if he is in possession,2 theright to appoint a receiver3 when interest is in arrears and the right to sell when theloan is not repaid by the stipulated time.4 In addition the mortgagee or any personinterested in the mortgage may apply to court for it exercise of the power to ordera sale of the property.5 Though essentially this power is exercised where there is

Securities in Immovable Property, Part V, Ch. 1 332–334


a foreclosure action, yet the Court of Appeal in England has exercised it on theapplication of the mortgagor to put an end to the mortgage in spite of the mortga-gee’s objection.6

1. Sections 24 & 28 Conveyancing and Law of Property Act.2. Section 23 Conveyancing and Law of Property Act.3. Sections 24 & 29 Conveyancing and Law of Property Act.4. Sections 24 & 25 Conveyancing and Law of Property Act.5. Section 30 Conveyancing and Law of Property Act.6. Palk v. Mortgage Services Funding Ltd. [1993] 2 WLR 415.

335. The mortgagee decides in his own interest whether he wishes to exercisehis power of sale. But once he decides to sell he has a equitable duty to takereasonable care to obtain the true market value at the date of the sale.1 The mort-gagee is trustee of the proceeds of sale for all those who are interested in the equityof redemption.2 The purchaser gets a title freed from the equity of redemption.3

1. Cuckmere Brick Co. Ltd. v. Mutual Finance Ltd. [1971] Ch D 949, Tse Kwong Lam v. WongChit Sen [1983] 1 WLR 1351, Malayan Bank Bhd. v. Hwang Rose [1997] 2 SLR 1; Lee NyetKhiong v. Lee Nyet Yun [1997] 2 SLR 713.

2. Section 26 Conveyancing and Law of Property Act.3. Ibid.

D. Discharge of Mortgages

336. Aside from being discharged by redemption, sale or by foreclosure, amortgage may be consolidated with other mortgages in the hands of the samemortgagee and mortgagor where this right is expressly provided in the mortgage.Physical destruction of the mortgaged property will not affect the security as theinsurance provisions will then apply. The mortgagee has a statutory right to insurethe property and to require that the money shall be applied to making good the lossor damage.1

1. Sections 24 & 8 Conveyancing and Law of Property Act.

II. Under the Land Titles Act1

337. There are two main differences between mortgages and charges undergeneral law and those under the Land Titles Act. First, the registered mortgage andthe registered charge secure different obligations. The registered mortgage securesloans while the registered charge secures periodic payments.2 Second, the regis-tered mortgage does not confer on the mortgagee the title to the land.3 These aside,in regard to the rights of the registered mortgagor and registered mortgagee as wellas in respect of registered charges, the general law applies.4

1. Cap. 157 1994 Rev Ed.2. Section 68 Land Titles Act.3. Ibid.4. Section 69 Land Titles Act.

335–337 Part V, Ch. 1, Securities in Immovable Property


III. Priority of Mortgages and Charges

A. Under General Law

338. The issue of priorities of mortgagees and charges is governed by theRegistration of Deeds Act.1 Where the mortgage is by deed Section 14 of the Actgives priority to that which is first registered, except where there is actual fraud. Inregard to informal mortgages, charges and liens Section 6 Registration of DeedsAct requires memoranda of such to be registered to be effective as against subse-quent purchasers for value. The doctrine of tacking of mortgages as modified bySection 16 Registration of Deeds Act is applicable. To apply the prior mortgageemust either have provided for the making of future advances or the giving of creditin the mortgage or where the subsequent mortgagee agrees to such advancementbeing made.

1. Cap. 269 1989 Rev Ed.

B. Under the Land Titles Act

339. In regard to registered mortgages and charges priority is determined bythe date of registration.1 However, tacking for further advances is available as setout in the Act. This requires either express provision for the further advances in themortgage or the consent of the subsequent mortgagee.2 The priority of unregisteredmortgages and charges is determined by the date of lodgement of caveats.3

1. Sections 46 & 48 Land Titles Act.2. Section 80 Land Titles Act.3. Section 49 Land Titles Act.

IV. Transfers of Mortgages and Sub-mortgages

340. The mortgagee’s interest may be transferred or in turn be mortgaged.Where this occurs a submortgage is created. In regard to land under the Land TitlesAct these respective dealings with the mortgage can be registered.1

1. Section 71 Land Titles Act.

V. Reverse Mortgages

341. Recently the subject of reverse mortgage over private residential propertyhas been mooted to take care of the growing problem of a greying society, whichsees more home-owners having as their only asset the house in which they areliving. This transaction which involves the owner of property mortgaging it inconsideration for periodic payments for the life of the mortgagor. The interest ispaid with the total sum loaned after the death of the mortgagor. The reverse mort-gage is available but it is not yet common place.

Securities in Immovable Property, Part V, Ch. 1 338–341


Chapter 2. Securities in Movable Property

§1. General

I. Rationale for Security

342. The granting of credit puts the creditor in a position of vulnerability.This is partly addressed by the taking of security, which is a proprietary right toenforce the payment of an obligation. ‘A proprietary interest provided by way ofsecurity entitles the holder to resort to the property only for the purpose of satis-fying some liability due to him (whether from the person providing the security ora third party) and, whatever the form of the transaction, the owner of the propertyretains an equity of redemption to have the property restored to him when theliability has been discharged’.1 The best way to think of a security interest is to seeit as carved out of the absolute interest in the property. It is in other words, asubsidiary right, where the primary right is the personal obligation of the debtor torepay the debt.

1. Morris v. Agrichemicals Ltd. [1997] 3 WLR 909.

343. Security is arguably economically efficient, and hence countenanced bythe law because it lowers the cost of funds. At the same time, there is the fear thatit may lock the borrower into a relationship with the same lender. This is especiallythe case with the floating charge, and there have been recommendations in Englandthat a proportion of a debtor’s assets which the floating chargeholder can look toshould be set aside for the unsecured creditors.1

1. Cork Committee on Insolvency Law and Practice (Cmnd 8558, 1982).

344. It is generally the case that insolvency proceedings do not affect preinsol-vency entitlements, as it is perceived that it would give people the wrong incentiveto push a company into insolvency or a person into bankruptcy. Put differently,insolvency laws recognize security interests created and will not remove its prioritystatus nor create any special priority. It has been said that ‘The agreement betweenthe parties must be construed in precisely the same way as if there had been nobankruptcy at all. . . . assignees in bankruptcy only succeed to the rights of thebankrupt, and have no higher or greater rights.’1

1. McEntire v. Crossley [1895] AC 457 at p. 461.

II. Types of Security

345. Some commentators believe that there are only four types of security.1

These would be the mortgage, charge, pledge, and lien, with the first two beingnon-possessory and the latter two possessory forms of security. In this scheme of

342–345


things, a trust interest is either not a security interest or is seen merely a form ofequitable mortgage. However, the other view is that the four types of security listedabove are not exhaustive.2 There are, in addition, quasi-security interests like titleretention, and set-off, which are strictly speaking, not security, although it servesmuch the same function. In the former, the general property is in fact retained bythe seller, whereas the latter creates a personal contractual right.

1. Goode, Legal Problems of Credit and Security (1988).2. Oditah, Legal Aspects of Receivables Financing (1991).

346. Certain forms of security are registrable and sometimes void if not soregistered, whereas others do not have to be registered. Consequently, it is some-times vital to distinguish the different forms of security or to determine whether thetransaction does indeed create security. Although the substance of the transactionwill determine its nature, this is often reflected in the form of the documentationitself.1 The Singapore Court of Appeal has held2 that a genuine sale and leasebacktransaction did not create a security interest even though it functioned in much thesame way. Thus, unlike the case with Article 9 of the Uniform Commercial Codein the United States, economic function is not the test. The focus is on the legalnature of the transaction, rather than on its economic effect.

1. Welsh Development Agency v. Export Finance Co. [1992] BCLC 148, applied in Nissho IwaiInternational (Singapore) Pte. Ltd. v. Kohinoor Impex Pte. Ltd. [1995] 3 SLR 268.

2. Thai Chee Ken v. Banque Paribas [1993] 2 SLR 609.

§2. Charges

I. General

347. Except for a number of statutory charges, the charge is a creature ofequity. The charge is usefully contrasted with the mortgage. In a legal mortgagethere is a conveyance of the property with the mortgagor retaining an equity ofredemption. The equity of redemption cannot be clogged, but there may be anexception in arm’s length commercial transactions.1 The charge on the other handis simply an encumbrance, the primary remedy for which is to apply to court fororder for sale or appointment of a receiver. It only gives the chargee certain rightsover the property as security for the loan. The property, otherwise known as thecollateral, remains in the debtor’s ownership, with the charge carved out of it. Themortgage can thus be seen as a charge with the right to foreclose. It is a charge plusextras. But a charge is a creature of contract, and can often look like an equitablemortgage, i.e., with power to appoint a receiver to sell the property. Further, thedefinition of a charge in the Companies Act includes a mortgage or agreement togive a charge or mortgage whether on demand or otherwise. Consequently, verylittle distinction is made between the charge and mortgage in the case of chattels,particularly since legal mortgages are seldom created in this context. Agreementsto give a charge or mortgage are also treated as present security through the maximthat ‘equity deems done that which ought to be done’. The doctrine of conversion

Securities in Movable Property, Part V, Ch. 2 346–347


or specific enforceability converts the agreement to give a charge into a presentcharge.

1. Citicorp Investment Bank (Singapore) Ltd. v. Wee Ah Kee (unreported, 22 May 1997); Lee EB[1997] SJLS 597.

348. Very little is also made of the distinction between the charge and theequitable lien, which is best seen as an equitable charge arising by operation of thelaw.1 These include, e.g., the unpaid vendor’s lien after property is conveyed topurchaser. In Singapore it has been held that this equitable lien can be varied orexcluded by the terms of a contract.2

1. Hewett v. Court (1983) 149 CLR 639 at p. 645.2. Bestland Development Pte. Ltd. v. Manit Udomkunnatum [1997] 2 SLR 42.

349. Instead the distinction is drawn between possessory and non-possesorysecurity. The former includes the pledge, which is a security interest created bytransfer not of property but of possession, with the pledgee having the right to sellthe bailed property on the debtor’s default. Similarly, the common law lien requirespossession but there is no accompanying right to sell. It is really a mere right ofretention.

350. The equitable charge, like other forms of equitable interests, is governedby the principle that the first in time of creation should prevail over subsequentequitable interests. The caveat is that the equitable charge is liable to be over-reached by equity’s darling, i.e., the purchaser of the legal estate or interest forvalue without notice. The registration regimes discussed below, however, modifythis system of priority.

II. Charge over One’s Own Indebtedness

351. One difficulty which has recently been overcome is the problem of a banktaking a charge over its depositor’s bank account, which bank account in turnconstitutes the bank’s own indebtedness to that customer. It was once believed thatthis was conceptually impossible.1 Legislation was passed to clarify that such chargescould always be created in Singapore.2 Even the common law seems to have acceptedthe possibility of such a charge, on the basis that there is no merger of interestsonce the chose in action is seen as a property interest, title to which is retainedby the bank depositor.3 However, it is not settled if a bank account is considereda book debt, a charge over which requires registration under Section 131 of theCompanies Act. The more accepted view seems to be that money belonging to acompany in a bank is not a book debt.4

1. Re Charge Card Services Ltd. [1987] 1 Ch 150.2. Section 9A Civil Law Act Cap. 43 1994 Rev Ed.3. Morris v. Agrichemicals, supra.4. Re Brightlife Ltd. [1987] Ch 200, Section 108(3)(k) Malaysian Companies Act 1965 (inserted

by Act 836 of 1992).

348–351 Part V, Ch. 2, Securities in Movable Property


III. Registration and the Perfection of Security

352. To protect other creditors who may lend without knowing of the exist-ence of prior security, there is a need for transparency. This is achieved throughthe requirement of registration. This is called perfection of security, and can alsobe done through possession or notice to the debtor in the case of security over adebt. Attachment occurs at an earlier state, where there is appropriation or anagreement supported by consideration. It is really an inter partes act. It is attach-ment that confers priority, subject to certain rules of property, not the process ofperfection.

353. The legal nature of the debtor determines the governing regime for reg-istration. In the case of a company, Section 131 Companies Act is the governingprovision. In the case of individuals, bills of sale may be created and these haveto be registered under the Bills of Sale Act1 which only covers chattel assets. Thereis thus no need to register bills of sale concerning choses in action such as debtsand shares. In contrast, the Companies Act requires registration of fixed chargesover book debts, though not over shares.

1. Cap. 24 1985 Rev Ed.

A. Individuals

354. The scope of the Bills of Sale Act is, however, unclear. Originally the billof sale was ‘a bill to denote a sale’. The mortgage was caught as that was anabsolute assignment coupled with an equity of redemption. But the regime wasextended to include documents that gave a power to seize chattels to persons whowere not in possession of the chattels. However, unlike some jurisdictions, whichhave widened the definition to include the equitable charge, the Singapore Bills ofSale Act does not expressly refer to such security. An argument may thus be madethat charges do not have to be registered as there is strictly no power to seize thecharged property. However, it is generally accepted here that the charge is registrableas a bill of sale, although a hire purchase agreement is not.1

1. McEntire v. Crossley, supra.

355. A bill of sale by way of security shall be void if it is not registered, evenagainst the borrower.1 The covenant to repay with interest may also be void, andif so, there is a need to turn to the law of restitution for recovery.2 Section 11 ofthe Bills of Sale Act states that if two registrable bills of sale are given comprisingthe whole or in part any of the same chattels, they shall have priority in the orderof the date of their registration.

1. Section 4(1)(a) Bills of Sale Act.2. Bradford v. Ayers (1924) WN 152 (cf. Davies v. Rees (1886) 17 QBD 408). This has been

followed in the Federal Court of Malaysia: Ponnuthurai v. Nasib Singh [1964] MLJ 425.



B. Companies

356. Section 131 of the Companies Act also makes reference to the Bills ofSale Act. Sub-Section (3)(d) states that a ‘charge or an assignment created orevidence by an instrument which if executed by an individual, would require reg-istration as a Bill of Sale,’ has to be registered if given by a company. Aside fromthis, other fixed charges over various collateral have to be registered, and thefloating charge also has to be registered, regardless of the underlying collateral.1 Aregistrable company charge has to be registered 30 days from the date of creation.2

1. Section 131(3)(g).2. Section 131(1).

357. In the case of the company, non-registration renders the charge void againstthe liquidator and other secured creditors. Unsecured creditors have no locus standito challenge it. However, a petition for winding up by such creditors will render theunregistered charge void, even before a liquidator is appointed, on the basis thatupon presentation of the petition, the unsecured creditors acquire certain rights inthe company and are no longer strictly unsecured.1 However, it is likely that thefailure to register does not render it void against purchasers since they are notnormally expected to search the register. The charge also remains valid against theborrowing company itself. Further, unlike the case under the Bills of Sale legisla-tion, the debt becomes immediately payable without demand under Section 131(2).

1. Ng Wei Teck v. OCBC [1998] 1 SLR 55.

358. Conversely, registration of a company charge or mortgage does not givethe chargeholder automatic priority. Priority is still determined by general propertylaw. However, registration gives constructive notice to those who are requiredto search the register. Registration is thus conclusive proof of the existence andvalidity of the charge. Just as non-registration may not affect the charge againstthose parties not expected to search the register, e.g., purchasers, registration maynot affect these very parties, which will therefore not have constructive notice ofany prior charges by the mere fact of registration. Further, even as against thoseexpected to search the register, registration only gives constructive notice of thecharge but not the terms of the charge.1 The position in Singapore is complicatedby the fact that the burden of proof is on the third party to show that it had no actualnotice of the existence of the charge.2

1. Wilson v. Kelland [1910] 2 Ch 306.2. Kay Hian v. Phua [1989] 1 MLJ 284, following the Canadian Supreme Court in Union Bank

of Halifax v. The Indian and General Investment Trust (1908) 40 SCR 510.

IV. Floating Charge

A. Conceptual Basis

359. This is a remarkable invention of equity which, while giving the creditorsecurity protection, allows the debtor to carry on trading with the collateral. This



has faciliated corporate growth, especially since the assets of a company are largelystock in trade, which is a fluctuating body of assets. It was the recognition thatfuture property could be assigned presently without a fresh act of assignment whenthe property came into existence that assisted the development of the floatingcharge.1 However, there is still debate over whether the floating charge is in factpresent security, since that requires the collateral to actually presently exist. Theincreasingly accepted view, however, appears to be that the floating charge ispresent security over a fund, the contents of which are constantly shifting and mayinclude future property within it.2 This follows from the previous argument that afund is considered to have a separate existence from its component parts.3 It islikely, however, that an individual cannot give a floating charge over future chattelssince Section 5(2) of the Bills of Sale Act requires the grantor to be the ‘true ownerat the time of execution of the bill of sale.’ However, an individual may be ableto create a floating charge over intangible property such as debts and shares, whichare not covered by the Bills of Sale legislation.

1. Holroyd v. Marshall (1862) 10 HLC 191.2. Goode, supra.3. Part II Chapter 1 §3.

B. Characteristics

360. Three probanda were set out by Romer LJ in Re Yorkshire WoolcombersAssociation Ltd.1: (a) if it is a charge on a class of assets both present and future;(b) if that class is one which in the ordinary course of the business of the companywould be changing from time to time; (c) until some future step is taken by or onbehalf of the mortgagee, the company may carry on business in the ordinary way.These criteria are not exhaustive. The floating charge, for example, does not haveto be over the company’s entire undertaking but can exist over a portion of it.2

1. [1903] 2 Ch 284.2. Dresdner Bank Aktiengesellschaft & Ors v. Ho Mun-Tuke Don [1993] 1 SLR 114.

C. Fixed or Floating?

361. Due to the registration regime under Section 131 of the Companies Act,it is often vital to distinguish the fixed from a floating charge. The other reason isbecause Sections 262(1) and 328(5) of the Companies Act provide that fixed chargeshave priority over certain kinds of preferential debts while floating charges do not.The nature of the charge seems to be determined by the amount of control over thecollateral, although this is sometimes affected by the nature of the collateral itself.It is thus possible to have a fixed charge over a shifting fund of book debts.1 Buteven if parties have successfully defined their relationship, it can be altered bysubsequent conduct. This is seen in local decisions where attempts to create fixedsecurity have failed because there was insufficient de facto control over the collat-eral.2 Conversely, even after crystallization converts the floating charge into a fixed



charge, it is still considered to have begun its life as a floating charge, so that uponcrystallization, no new charge is created.3

1. Siebe Gorman & Co. Ltd. v. Barclays Bank Ltd. [1979] 2 Lloyd’s Rep 142.2. Chase Manhatten Bank NV v. Wong [1993] 1 SLR 1.3. Dresdner Bank, supra.

362. It is sometimes possible to create different charges over the same collat-eral in its various alternate forms. For example, there could be a fixed charge overbook debts, followed by a floating charge over its proceeds when realized.1 Thisthough may not be readily accepted in all cases, and much will turn on the factsof the case.2

1. Re New Bullas [1994] BCC 36.2. Royal Trust Bank v. National Westminster Bank plc [1996] 2 BCLC 682.

D. Priority of the Floating Charge

363. The floating charge is intrinsically vulnerable as it allows the debtor tocontinue trading with the underlying collateral in the ordinary course of business.It is only upon crystallization that it is treated like a fixed charge. Prior to that, forexample, it takes subject to equities like the set-off, and is subordinate to other fixedcharges.1 In addition, Section 330 of the Companies Act provides that a floatingcharge created within six months of commencement of winding up shall be invalidexcept to the amount of any cash paid to the company at the time of or subsequentlyto the creation of and in consideration for the charge.

1. Business Computers Ltd. v. Anglo African Leasing Ltd. [1977] 2 All ER 741.

364. Since trading power is an implied term of the agreement to create afloating charge, cessation of business as a going concern correspondingly leads tocrystallization of that charge. Thus, winding up of the company and disposal of itsundertaking also result in crystallization. Crystallization can also be by way ofnotice or may occur automatically, if that is stipulated in the charge agreement. Thelatter probably works in Singapore, as it does in much of the Commonwealth. Itreflects the idea that the charge is a creature of contract. Although automatic crystal-lization, in particular, appears somewhat unfair due to its lack of transparency, itmay be that retention of control by the company will result in the floating chargeebeing estopped from denying that the company retained authority to deal with theproperty. Although actual authority may have ended, apparent authority continues.1

1. Goode, supra, cf. Oditah, supra.

365. Between two floating charges, the charge earlier in execution and regis-tration takes priority even though second crystallizes first. The reason for this is thatit is contrary to the parties’ intentions that there should be a second floating charge.1

The exception to this is where the first floating charge envisages subsequent floating



charges, but perhaps only where the second floating charge is over a smaller classof assets belonging to the company.2

1. Re Benjamin Cope & Sons Ltd. [1914] Ch 800, Re Household Products Co. Ltd. 124 DLR (3d)325.

2. Re Automatic Bottle Makers Ltd. [1926] 1 Ch 412.

V. Negative Pledge

366. As we have seen, the floating charge loses priority to a subsequent fixedcharge, if given in the ordinary course of business. Some lenders may desireadditional protection through the use of a negative pledge, where the debtor under-takes not to grant subsequent security in priority to or pari passu with the floatingcharge without the debtor’s consent. Although the negative pledge, by itself, isprobably an equity having no proprietary effect, it may result in a third party takingsecurity in breach of the pledge, and knowing of it, being subordinated to theinterest of the floating chargeholder.1 However, it has also been held that construc-tive notice of a charge does not extend to the contents of that charge, so that thethird party would not automatically have notice of the negative pledge, which is anoptional extra.2 However, the position in Singapore is complicated by the fact thatit has been held that the burden is on the third party to show that it has no actualnotice of the negative pledge.3

1. The genesis for this rule appears to be English & Scottish Mercantile Investment Co. v. Brunton[1892] 2 QB 700, applied in Kay Hian, supra.

2. Wilson v. Kelland, supra (but see Form 34 of the Companies Regulations 1987 (138/87) ).3. Kay Hian, supra; Tjio (1995) 16 Company Lawyer 28.

§3. Pledge

I. General

367. We have seen that only two forms of legal interests can exist over per-sonal property: ownership and possession. In the case of a pledge, the generalproperty or ownership remains with the pledgor, while the special property orpossession passes to pledgee. On one view, the pledge does not create a propertyinterest.1 However, the pledgee can dispose of his special property,2 which thepledgor can recover by paying off the debt. Even if the pledgee’s disposition iswrongful, the pledgor cannot sue in conversion until the debt is repaid. This isbecause the pledgee has the entire present interest till then. Payment causes theimmediate right to possession to revert to the pledgor.3 This shows that a pledgedoes not create a mere right of action, previously unassignable at law, but a trans-ferable property right. At the same time, the pledgor can also sell off its interest,so that pledgee is liable in conversion for refusing to permit the pledgor’s transfereeto redeem the pledge.4

1. The Odessa (1916) AC 145, Chan Cheng Kum v. Wah Tat Bank Ltd. [1971] 1 MLJ 177 (PC,from Malaysia).



2. Donald v. Suckling (1866) LR 1 QB 585.3. Halliday v. Holgate (1868) LR 3 Ex 299.4. Franklin v. Neate (1844) 13 M & W 481; The Federated Malay States v. Harnam Kaur [1933]

MLJ 267.

368. The pledge is different from a legal mortgage in that the mortgagee hastitle to the goods, subject to right of redemption, but not possession. In a pledge,the security is the possession itself. It is thus not registrable as a bill of sale sincethe mischief of the Bills of Sale Act1 is to cure the problem of ostensible owner-ship, which is a particular problem when security or property interests are divorcedfrom possession. This would be the case even if a document were used to evidencethe transaction, since the transaction begins with pledgor voluntarily giving possesionof the goods to pledgee. In these instances, the document does not give right to takepossession, it only regulates the terms on which they are to be held.2

1. Cap. 24. 1985 Rev Ed.2. Ex Parte Hubbard (1886) 17 QBD 699, United Malayan Banking Corp Bhd v. Lim Kang Seng

[1994] 2 SLR 787.

369. The pledge is also different from the common law lien, arising voluntarily,whereas the lien generally arises by operation of law. These include the commoncarrier’s lien, the innkeeper’s lien, etc. Liens are also possessory rights but they aremore limited in scope. The lienee cannot deal or sell his interest and is a passiveright of retention.1 If the debtor defaults, the lienee does not have the power toimmediately sell the property. Nor can execution be levied against the goods.Powers of sale can, however, be conferred by statute on a lienee.2 By contrast, theEnglish law of pledge confers on the pledgee the right of sale without recourse tothe courts.3 This is peculiar to English law, and is best seen as an implied authoritygranted by the pledgor to do so; there is a need to petition the court for sale someother common law jurisdictions. Such an implied power of sale exists in Singapore.4

1. Re Cosslett (Contractors) [1997] 4 All ER 115; AP Bell, Modern Law of Personal Property(1989) at pp. 136–137.

2. E.g., Section 51 Sale of Goods Act Cap. 393 1994 Rev Ed.3. The Odessa, supra.4. Malayan Banking Bhd v. Hwang [1997] 2 SLR 1.

II. Creation of a Valid Pledge

370. The transfer of possession is necessary for the creation of a pledge. It isnot enough that there is authority to take possession of goods, as that will createa charge.1 Similarly, in cases where possession is meaningless, the security arrange-ment may operate as an equitable mortgage or charge. This is the situation withcertain documentary intangibles like shares, which do not have the status of anegotiable instrument, and thus cannot strictly speaking be possessed.2 However,possession is a highly fluid concept, and may be actual, constructive or symbolic.It must, however, be exclusive and lawful.3 Delivery is thus essential.4 The pledgeemust therefore reduce the property into his possession. This can sometimes occur



even though physical possession remains with the pledgor, for example, when keysto the safe where shares are deposited are handed over to the pledgee, so long asthe pledgee has an irrevocable licence to enter the premises and use the keys.5 Theissue is one of control, or exclusive possession. It is thus difficult to create a pledgein connection with circulating assets or stock in trade.

1. In re Bonds (1921) 2 FMSLR; Official Assignee of Madras v. Mercantile Bank of India [1935]AC 53 (PC, from India).

2. Chase Manhatten v. Wong [1993] 1 SLR 1.3. Re Bonds, supra.4. Dublin City Distillery v. Doherty [1914] AC 823.5. Wrightson v. McArthur [1921] 2 KB 807, Chase Manhatten v. Wong, supra.

III. Usual Settings for Pledges

371. Outside the pawnbroking business, where actual possession of the pledgedgoods is retained by the broker, pledges are most often created in the financing ofinternational trade. A bank will take a pledge from the consignee over the consign-ee’s bill of lading. The bill is a document of title to goods contained on the ship,and represents the underlying goods.1 When the goods arrive, the consignee goesto wharf to collect them. The carrier, however, will only release the goods againstthe bill of lading and payment. The consignee obtains finance by pledging the billof lading to the bank. The bank next collects the goods for the consignee, and thenreleases the goods to the consignee under a trust receipt, which records the fact thatbank is a pledgee of the goods. It thus retains constructive, though not actual,possession of the goods through its agent bailee, the consignee. In some commonlaw jurisdictions such pledges must be registered, but not in England nor, as islikely, Singapore.2

1. In Singapore and Malaysia, mate’s receipts, by custom, are treated like bills of lading: ChanCheng Kum v. Wah Tat Bank Ltd. [1971] 1 MLJ 177 (PC, from Malaysia).

2. North Western Bank v. Poynter (1895) AC 56.

IV. Attornment

372. Aside from pledges of bill of ladings, dealings with other kinds of docu-ments of title require an attornment for possession to pass. For example, a ware-houseman who holds property on behalf of pledgor may be ordered by the pledgorto hold on behalf of the pledgee. This change of possession is perfected by thewarehouseman attorning or acknowledging to the pledgee that the goods are heldfor him. Transfers of delivery orders and warrants thus require an attornment.1

Without it, the transfer of the receipt creates a bill of sale. This has to be registeredunder the Bills of Sale Act unless the bill was created in the ordinary course ofbusiness.

1. Dublin Distillery v. Doherty.



Index

Index

The numbers given refer to paragraphs:

Co-ownershipjoint tenancy: 176–178, 184tenancy in common: 179–184see also: Strata title

Deathdevolution of property on: 283–286donatio mortis causa: 287–288effect on Muslim owners: 281–282estate duty: 291personal representatives: 289–290

Developmentsee Planning

Easementsacquisition under general law: 144–145acquisition under Land Titles Act:

148–152characteristics: 140–143distinguished from other rights:

135–139extinguishment under general law:

146–147extinguishment under Land Titles Act:

153Equitable interest: 45, 47–49, 68–73,

75–76, 258–260remedies: 50, 320–325

Equities: 74–75, 259–260Equity reception: 28, 45–46, 68Estates in land

in perpetuity: 64fee simple: 65State lease: 64

Estatessee: ownership of land

Executive process: 23–24Expropriation: 300–305Fiduciaries: 52, 323–324

Acquisition of interests in landinfants: 205married woman: 209mentally disordered person: 206partnership: 208societies: 207foreign persons: see Residential Property

ActApplication of English Law Act: 15, 19,

27Assignments

generally: 385–387in equity: 389–390priorities: 394restrictions on: 391statutory: 388subject to equities: 392

Background, general: 1–5Bailment: 255–256Charge

floating: 358–364generally: 168, 170–174, 326–329,

346–349negative pledge: 365over own indebtedness: 350priorities: 349, 362–364registration: 351–357

Chattel realsee: leasehold estate

Choses in action: see AssignmentsClassification

movable and immovable: 38, 40–43real and personal: 37–39, 41–44tangible and intangible: 243–247

Common law: 17–20, 30Constitutional framework: 10–11

system: 6–9


Index

Fixtures:see: Land

Freehold estate: 59Future interests: 34–35, 358

rule against perpetuities: 36Gifts: 295–296History, property law: 25–30Insolvency: 306–308Joint ownership

see: co-ownershipJudicial process: 21, 22Land Titles Act:

assurance fund: 88bringing under: 84–85caveats: 86, 91–94effect of registration: 87–88indefeasible title: 88–90overriding interests: 89qualified title: 86priority: 87unregistered interests: see caveats

Land, meaning of: 61–62, 297Lease:

assignment: 107–108determination of: 110kinds of: 96–100landlord’s rights and duties: 117–118remedies of landlord: 12sublease: 109tenant’s rights and duties: 119usual covenants: 120validity: 101

Leasehold estate: 59–60; 251Legal interest: 67; 252–257Legislative process: 12–13Licence

contractual: 132coupled with an equity: 134–135coupled with grant: 131distinguish from lease: 128–129gratuitous: 130nature of: 127

Mixing, of property: 298–299Mortgage

generally: 168–169, 171–174, 330–331priorities: 337–338remedies: 332–334reverse: 340

Notice, doctrine of: 45Ownership

importance of: 263

of land: 31–34and possession: 252

Planningcontrol of rent: 223decontrol of rent: 223–225develop: 219development charge: 221land acquisition: see Land acquisition

Master Plan: 217Planning Act: 216–217Possession:

acquisition of: 292, 294adverse: 54–55constructive: 293right to: 53, 56

Profits a prendre: 137, 154Property

intangible: 244–247mixed funds: 248–250movable: 243–250quasi: 260special: 254

Public Housingeligibility: 236general: see Housing and Development

BoardHousing and Development Board: 227,

230–235home ownership policy: 232–233management of common property: 239middle income housing: 240–242rights and obligations of owners:

236–238Real property: 58–60Registration of deeds: 77–83

evidence of title: 79priorities: 80–82

Registration of titlessee Land Titles Act

Residential Property Actacquisition by foreign person: 213–214exemption: 215foreign person, meaning of: 211residential property: 212

Restrictive covenantannexation of benefit: 158–170breach: 167discharge: 162general: 155–156running of burden: 157

Land Titles Act: 163–166


Index

Security interestscharges: see Chargegenerally: 261–262, 341–345in land: 168–174mortgages: see Mortgagepledge: 366–373retention of title clauses: 379quasi-security: 378–384trust receipts and hypothecation:

374–376Sale of property

choses in action: see Assignmentsland: 264–275specific goods: 277–278unascertained goods: 279–280

State land: 63–66Strata title

by-laws: 198

common property: 188–189, 195–196condominium: 185general: 185–186maintenance: 192management corporation: 190–191,

195–197meetings: 193–194subsidiary proprietor: 199–201termination of strata title plan: 202–203

Trustsconstitution of: 318constructive: 319–325discretionary: 317express: 313–316general: 309–310

Quistclose: 384resulting: 311–312

Written law: 15–16


Index

modelpropsingapore (book)

Documents

law of property

trust law

faculty of law

facultyof law

singapore property

administrative law

common law

journal of business