Introduction 

Garnishee proceedings are one of the many options available to a judgment creditor to enforce a judgment debt. These proceedings are typically used to obtain monies in a judgment debtor’s bank account – such that the bank in question would have to transfer the monies in the account directly to the judgment creditor to satisfy the judgment debt owed.

Garnishee proceedings consist of two stages. First, a judgment creditor must obtain a provisional garnishee order, ordering the garnishee (often a bank) to show cause as to why the order should not be enforced. Second, the judgment creditor will then seek to make the garnishee order final at what is known as the “show cause” hearing.

However, a judgment creditor faces complications when the bank account sought to be garnished is in the joint names of the judgment debtor and a third party. The previous position was, at least generally, that joint-bank accounts could not be garnished: One Investment and Consultancy Ltd v Cham Poh Meng [2016] 5 SLR 923 (One Investment). However, the High Court in Timing Ltd v Tay Toh Hin and anor [2020] SGHC 169 (Timing No. 1) declined to follow such a position, and instead ruled that provisional garnishee orders could be issued against joint-bank accounts if there is strong prima facie evidence that all the monies in the joint-bank account(s) belong to the judgment debtor.

Subsequently, the High Court in Timing Ltd v Tay Toh Hin and anor [2021] SGHC 5 (Timing No. 2) (the appeal in respect of the show cause hearing), held that even though a provisional garnishee order had been issued, the judgment creditor failed to prove, on a balance of probabilities, that the monies in the joint-bank account belonged solely to the judgment debtor. The High Court accordingly declined to grant a final garnishee order despite the judgment creditor having already shown a strong prima facie case during the first stage.

We take a look at Timing No. 2 and draw some lessons from this case.

Brief Facts

The High Court in Timing No. 1 granted a provisional garnishee order because there was strong prima facie evidence that the judgment debtor owned all the monies in the two joint-bank accounts held by the judgment debtor and his wife.

At the show cause hearing, the judgment creditor applied to make the provisional garnishee order final against the judgment debtor. However, this application was dismissed by the Assistant Registrar (AR), who declined to attach two joint-bank accounts on the basis that the judgment creditor had failed to prove on a balance of probabilities that the entire sum in the joint accounts belonged to the judgment debtor alone. The judgment creditor appealed against the AR’s decision.

Holding

The High Court affirmed the AR’s decision and dismissed the judgment creditor’s appeal. This was despite there being strong prima facie evidence that the judgment debtor solely owned the monies in the joint-bank accounts.

In doing so, the High Court held that:

1. The judgment creditor still bears the burden of proof to show that the garnishee order should be made final. The effect of the provisional garnishee order operated only to shift the “evidential burden” to the judgment debtor and his wife to challenge the prima facie case. Nevertheless, the assessment would ultimately be a holistic one based on the entirety of the evidence adduced.
2. Accordingly, the High Court found that the judgment creditor failed to show, on a balance of probabilities, that the judgment debtor solely owned the monies in the joint-bank account. The fundamental question was the parties’ intentions in opening the joint-bank account as discerned from the available evidence. On this note, the evidence showed that (among others): 
1. The monies in the joint-bank account had historically been used as and when they were needed and for household purposes. These included jointly incurred expenses such as utility payments and household purchases.
2. The fact that transfers of monies were effected by the judgment debtor (and not his wife) was not decisive as to the ownership of the monies. Just because the judgment debtor effected the transactions did not preclude his wife being able to do so in her own right.
3. The mere fact that business transactions were occasionally conducted out of the joint-bank accounts by the debtor did not mean that the wife did not have any ownership over the monies. Indeed, the wife had used the monies for her own individual purposes as well.
4. Further, it could not safely be said that once a joint-bank account was used for a non-joint purpose, it would, without more, determine the ownership of monies in the account.

The High Court also found that a strong presumption of advancement arose to show that the judgment debtor intended to gift his wife a beneficial interest in his contributions to the joint-bank accounts. This was given: (a) the closeness of the relationship between the couple, who were married for over 36 years and had relocated from the United States to Singapore, and (b) the wife’s apparent financial dependence on the judgment debtor in her role as homemaker – to the extent that she did not hold any Singapore bank accounts in her sole name. Therefore, the presumption of advancement provided a further basis for the Court to deny the grant of a final garnishee order.

Significance

The decisions in Timing No. 1 and Timing No. 2 strike a balance between preventing judgment debtors from insulating their assets through joint-bank accounts, while protecting the interests of innocent joint-bank account holders. This balance is struck by first requiring the judgment creditor to demonstrate a strong prima facie case that the monies belonged to the judgment debtor, notwithstanding that they are in a joint-bank account and subsequently, at the show cause hearing, with the benefit of all the relevant evidence, to prove on a balance of probabilities that monies in the joint-account belonged solely to the judgment debtor. Ultimately, strong prima facie evidence that the monies solely belonged to the judgment debtor during the first stage will not necessarily translate to a final garnishee order during the show cause hearing.

The decisions in Timing No. 1 and Timing No. 2 taken in totality also suggest that while not an absolute bar to a garnishee order, the fact that the monies sought to be garnished are in a joint-account presents judgment creditors with a heavy burden of proof. In that regard, the decisions stand together with the weight of Commonwealth authority and the decision in One Investment, which continue to militate against the prospect of judgment creditors seeking to garnish monies in joint-accounts.

If you have any questions about enforcement of a judgment debt, please feel free to contact us.