Salbiah Bte Adnan v Micro Credit Pte Ltd

Edmund Leow JC:

[1] This case concerns a caveat (“the Caveat”) lodged by the Defendant moneylender on a property (“the Property”) held by the Plaintiff and her ex-husband (“Zam”) as joint tenants. The Caveat was lodged to secure the Defendant’s interest in the sale proceeds of the Property to repay a loan that Zam obtained from the Defendant. The Plaintiff claims that she did not consent to the lodgement of the Caveat on the Property and is applying for it to be removed. As will be seen, this case raises some interesting and difficult issues of land law, in particular, the law in relation to caveats.

[2] The Plaintiff and Zam were married on 24 November 1995 and divorced on 6 December 2012.

[3] The Defendant is a licensed moneylender under the Moneylenders Act (Cap 188, 2010 Rev Ed) (“the MLA”).

[4] The rest of the facts are disputed. I will therefore present both the Plaintiff’s and the Defendant’s accounts separately.

[5] On 24 September 2009, Zam approached the Defendant to borrow $2,000 for the Hari Raya festive season. He filled up the loan application form and submitted copies of the supporting documents required, such as his identification card and recent payslips. The Defendant then informed Zam that his loan application was approved for the sum of $1,000 and asked him return with the Plaintiff to sign the loan documents.

[6] Zam then returned with the Plaintiff to the Defendant’s premises on 26 September 2009. There, Zam signed various documents including a contract stating that he was borrowing $1,000 at an interest rate of 297% per annum. Paragraph 6 of the notes to the contract (“the Notes to the Contract”) provided as follows:

[7] Further, both Zam and the Plaintiff signed a document authorising and consenting to the lodgement of a caveat by the Defendant on the Property (“the 1st ACLC”). The Defendant tendered a copy of the 1st ACLC bearing what purports to be Zam’s and the Plaintiff’s signatures. The pertinent part of the 1st ACLC states as follows:

[8] On 21 October 2009, Zam approached the Defendant again to borrow another $1,000. As Zam had been making prompt repayments of the 26 September 2009 loan (“the 1st Loan”), the Defendant agreed to grant Zam a further loan of $1,000 (“the 2nd Loan”). The 2nd Loan was advanced on the same terms as the 1st Loan (apart from the schedule for repayment) save that this time, by the Defendant’s own admission, it did not ask for or obtain the Plaintiff’s authorisation and consent to the lodgement of a caveat on the Property. The caveat authorisation document for the 2nd Loan (“the 2nd ACLC”) only bears Zam’s signature.

[9] Zam fully repaid the 1st Loan promptly. However, he was imprisoned for drug offences shortly after he obtained the 2nd Loan and failed to repay any part thereof despite repeated reminders (as of 23 January 2014, the outstanding sum he owed to the Defendant, including principal, interest and late fees, was $28,334.19). On 19 November 2009, the Defendant took out the Caveat on the Property stating the following ground of claim:

[10] On 6 December 2012, the Plaintiff obtained a divorce from the Syariah Court. The Syariah Court ordered, inter alia, that the Property be transferred to the Plaintiff, with no refunds to be made to the Defendant’s Central Provident Fund account (“the Syariah Court Order”). The Plaintiff then filed a transfer application with the Housing Development Board (“HDB”), whereupon she was informed by the HDB that the Property could not be transferred until the Caveat was removed. According to the Plaintiff, this was the first time she discovered the existence of the Caveat. She denies ever accompanying Zam to the Defendant’s premises to apply for a loan, and says that the signature on the 1st ACLC is not hers.

[11] In addition, Zam affirmed a statutory declaration on 27 November 2013 (which the Plaintiff exhibited to her affidavit) stating that he approached the Defendant for a loan of $1,000 “[s]ometime in 2009”. He was handed a one-page loan document which referred only to the fact of the loan and the terms of repayment; there was no mention at all that the loan would be paid from the sale proceeds from the Property or that a caveat would be lodged against the Property. Zam duly paid three instalments of the loan and defaulted on the balance payment.

[12] The Plaintiff submits that the Caveat should be removed on the following grounds:

(a) the Caveat is defective because it failed to identify the particulars of the estate or interest claimed by the Defendant, as required by s 115(1)(c) of the Land Titles Act (Cap 157, 2004 Rev Ed) (“the LTA”);

(b) there was no consent from both the Plaintiff and Zam to the lodgement of the Caveat by the Defendant;

(c) even if there was such consent, it did not create an “interest in land” within the meaning of s 115(1) of the LTA entitling the Defendant to lodge the Caveat; and

(d) in any event, any agreement to use the Property or its sale proceeds as security or collateral for Zam’s debt is void pursuant to s 51(1) of the Housing and Development Act (Cap 129, 2004 Rev Ed) (“the HDA”).

I should note that the Plaintiff is not arguing that the interest rate charged by the Defendant is excessive under s 23 of the MLA.

[13] For its part, the Defendant contends that by signing the 1st ACLC on 26 September 2009, Zam and the Plaintiff had given it an interest in the proceeds of the sale of the Property, which constitutes an “interest in land” entitling the Defendant to lodge the Caveat. Although the Plaintiff did not sign the 2nd ACLC, the two loans should be seen as one transaction. In the alternative, Zam’s consent alone was sufficient to confer on the Defendant an interest in the sale proceeds of the Property under the concept of joint tenancy.

[14] There is a factual dispute between the parties on whether Zam and the Plaintiff had agreed to the Caveat being lodged on the Property in the event of Zam’s default. On the evidence before me, I consider the Defendant’s account to be far more credible. The Defendant has tendered a copy of the 1st ACLC bearing what appears to be Zam’s and the Plaintiff’s signature, as well as a copy of the 2nd ACLC bearing Zam’s signature. On the other hand, the Plaintiff has simply issued a bare denial that she signed the 1st ACLC and has failed to prove that the signature purporting to be hers on the 1st ACLC is a forgery, which she could easily have done by tendering copies of other official documents bearing her actual signature.

[15] I also disbelieve the Plaintiff’s claim that she only became aware of the Caveat when she attempted to effect the transfer of the Property. Under s 117 of the LTA, the Registrar of Titles (“the Registrar”) is required to notify the caveatee whenever a caveat has been lodged and accepted by the Registrar. The Defendant has tendered evidence of a letter from the Registrar stating that notice of the Caveat was sent by post to the address of the Property on 3 December 2009. In response, the Plaintiff could only say that she did not receive the said letter.

[16] As for the account of facts contained in Zam’s statutory declaration, I find it to be inconsistent with the documentary evidence and place no weight on it. Zam makes no mention of the fact that he took out two loans, and claims that he was only given a one-page loan document to sign. However, the Defendant has tendered copies of the loan documents evidencing both the 1st Loan and the 2nd Loan. The documents for each loan numbered about 8–10 pages, and each page bore Zam’s signature and thumbprint (with the exception of the ACLCs, which bore his signature but not his thumbprint). There is no indication that these documents are anything but genuine, and it would indeed be quite preposterous for the Defendant to resort to falsifying them and forging Zam’s signature for the purpose of recovering a relatively miniscule debt.

[17] That said, the above factual findings are ultimately immaterial because, in my view, this case turns on the following issues:

(a) Do the 2nd ACLC and the other loan documents (collectively, the “Loan Documents”) confer on the Defendant an interest in the Property that is capable of supporting the Caveat?

(b) Assuming that the Defendant has an interest in the Property, should the Caveat nonetheless be removed for failure to comply with the formal requirements of s 115 of the LTA?

[18] It is common ground that the Caveat was lodged in respect of the 2nd Loan and not the 1st Loan (which the Defendant says was repaid promptly). Consequently, does it matter that the Plaintiff did not sign the 2nd ACLC?

[19] As a preliminary point, I have no hesitation in rejecting the Defendant’s submission that the two loans should be considered as part of the same transaction. The two loans were obtained on separate occasions and a separate set of documentation was prepared for each. Furthermore, the claim in the Caveat (reproduced at [9] above) distinguishes between the two loans by referring to a loan application dated 21 October 2009 (ie, the 2nd Loan). Therefore, the two loans did not form part of the same transaction, and the Plaintiff’s consent to the 1st ACLC in respect of the 1st Loan could not bind her in respect of the 2nd Loan.

[20] I turn then to the legal issue of whether the Plaintiff’s consent was required for the 2nd ACLC. The Defendant says that Zam’s consent alone was sufficient to bind the Property under the concept of joint tenancy. The sole authority provided by the Defendant for this proposition is Kua Hui Li v Prosper Credit Pte Ltd [2014] 3 SLR 1007 (“Kua Hui Li”). That case also involved an application by a plaintiff to remove a caveat lodged on her property by a moneylender. The caveat was lodged pursuant to a loan agreement between the plaintiff’s former husband and the moneylender under which the husband agreed to repay the loan from the sale proceeds of the property and consented to the lodgement of a caveat by the moneylender against the property. The plaintiff did not consent to this arrangement. Choo J noted that the following questions arose (at [8]):

[21] However, Choo J ultimately did not answer the third and fourth questions because he found that the interest rate charged by the moneylender in that case (namely, 791.61% per annum) was excessive and set aside the loan agreement under s 23(3)(b) of the MLA (at [14]). I therefore fail to see how Kua Hui Li assists the Defendant in any way. In fact, it is trite that joint tenants have to act jointly to effectively bind the estate which they hold jointly: Tan Sook Yee, Tang Hang Wu and Kelvin F K Low, Tan Sook Yee’s Principles of Singapore Land Law (LexisNexis, 3rd Ed, 2009) (“Tan Sook Yee”) at para 9.9.

[22] But that is not the end of the issue. Might it be argued that a joint tenant’s assignment of his legal or equitable interest in the sale proceeds of a property is an act operating upon his own share that severs the joint tenancy and converts it into a tenancy in common? In the leading case of Williams v Hensman (1861) 1 John & H 546 at 557, Page Wood VC set out the following three methods of severance:

[23] This is a vexed area of law. For example, the English and Australian authorities appear to be divided over whether a charge granted by one joint tenant to a third party is an alienation that effectively severs a joint tenancy: Tan Sook Yee at para 9.40. In his article “Partial Alienation by One Co-Owner of Land” [2000] SJLS 92, Professor Barry Crown surveyed the difficulties in this area and concluded as follows (at 108–109):

[24] However, I need not decide this issue because I find that, as a matter of interpretation, the Loan Documents did not confer on the Defendant any legal or equitable interest in the sale proceeds of the Property. I will elaborate on this later in the next section.

[25] Section 115 of the LTA allows any person “claiming an interest in land” to lodge with the Registrar a caveat prohibiting the registration of any dealing affecting the land. Two other sections in the LTA are pertinent for the purposes of construing the phrase “claiming an interest in land”. The first is s 4, which defines “interest” as follows:

The second is s 115(3), which provides as follows:

[26] The Defendant contends that the effect of the Loan Documents was that they granted it an interest in the sale proceeds of the Property. Pursuant to s 115(3)(a), this counts as an “interest in land” for the purpose of lodging a caveat. In reply, the Plaintiff submits that the Loan Documents merely granted Zam’s authorisation and consent for the Defendant to lodge a caveat, which is insufficient to create an interest in land.

[27] There are thus two issues that I have to decide:

[28] The progenitor of s 115(3)(a) of the LTA is s 93(1)(3) of the Land Titles Ordinance 1956 (“the LTO”). That sub-section stated:

[29] Significantly, no such provision can be found in the Real Property Act 1900 (NSW) (“the NSW RPA”), on which the LTO was modelled (the drafter of the LTO, John Baalman (“Baalman”), was an expert in the Torrens system of land titles registration in New South Wales: ACS Computer Pte Ltd v Rubina Watch Co (Pte) Ltd and another [1997] 1 SLR(R) 1006 at [18]). Section 74B(1) of the NSW RPA simply states: “A person who claims a legal or equitable estate or interest in land that is the subject of a primary application, or in any part of any such land, may … lodge with the Registrar-General a caveat prohibiting the bringing of that land or part under the provisions of this Act”. The same can be said of similar provisions in other Australian jurisdictions, such as s 89(1) of the Transfer of Land Act 1958 (Vic). Consequently, the Australian courts have held that an interest in the sale proceeds of land is insufficient to found a caveat. In Dykstra and another v Dysktra (1991) 22 NSWLR 556, the Supreme Court of New South Wales noted that a contractual right to payment of a sum of money out of the proceeds of sale of a particular property does not give rise to a caveatable interest (at 559). In Epple v Wilson [1972] VR 440, the Supreme Court of Victoria held that an equitable right to the sale proceeds does not do so either (at 444).

[30] It is therefore necessary to consider why Baalman included s 93(3) in the LTO. Some light is shed by his authoritative commentary on the LTO. He wrote in The Singapore Torrens System (The Government of the State of Singapore, 1961) at pp 195–196:

[31] The equitable doctrine of conversion that Baalman referred to requires some elaboration. One of the common law methods for settling land was the device of a trust for sale. This arose where land was transferred by deed or will to trustees with an imperative direction that they were to effect a sale and to hold the proceeds of sale upon certain specified trusts. The equitable doctrine of conversion states that in such cases, the interests of the beneficiaries were in the proceeds of sale and not in the land, because equity looks on that as done which ought to be done – the imperative direction to turn land into money impresses the land with the quality of money no matter how long the sale may be postponed. The effect of this doctrine was that when the trustees sold the land in performance of their duty to sell, the purchaser took the land free of any trusts, since the beneficial interests were imposed upon the sale proceeds and not the land itself: see Edward H Burn and John Cartwright, Cheshire and Burn’s Modern Law of Real Property (Oxford University Press, 18th Ed, 2011) at pp 104–105.

[32] The equitable doctrine of conversion gives rise to problems in cases where the operation of another legal mechanism is contingent on the beneficiary of a trust for sale having an interest in land. One example can be found in the case of Irani Finance Ltd v Singh and others [1971] 1 Ch 59. Under s 35 of the Administration of Justice Act 1956 (c 46) (UK), a judgment creditor could obtain a court order imposing a charge on “any such land or interest in land of the debtor” to secure the payment of the judgment debt. The issue was whether the first and second defendants, who were legal and equitable tenants of land conveyed to them under a trust for sale, had “land or interest in land” capable of being charged under s 35. The Court of Appeal held that they did not, reasoning as follows (at 79–80):

[33] It therefore appears that the purpose of s 115(3)(a) of the LTA is to avoid difficulties like these and allow a beneficiary of a trust for sale to protect his or her interest by means of a caveat. This is not to say, however, that s 115(3)(a) is restricted only to individuals whose interests arise under a trust for sale. The provision is phrased in general terms, and Baalman himself made it clear that the trust for sale is just one example under which a person might acquire an interest in the sale proceeds of land. Another example might be the interest of a foreign person who inherits a property under the will of the deceased owner or through the law on intestate succession: Tan Sook Yee at para 15.11. Under s 3(3) of the Residential Property Act (Cap 274, 2009 Rev Ed), no estate or interest in the property would pass to the foreign person; however, s 3(4) imposes a duty on the personal representatives of the deceased to sell the property within five years and pay the net sale proceeds to the foreign person. A foreign person in such a situation might therefore be said to have an interest in the proceeds of sale of land.

[34] In both of the above cases, the caveator has a definite entitlement to the proceeds of sale because the trustee or the personal representative is charged with a duty of sale. There is no doubt that the property has to be sold, and the only issue to be decided is that of timing. It therefore makes sense to allow such persons to lodge caveats to protect their interest in the sale proceeds. But where there is no duty of sale and the caveator’s interest in the sale proceeds is wholly contingent on the owner of the property deciding to sell, would that suffice as a caveatable interest?

[35] If the matter were free of authority, I would have thought that such an interest would be insufficient to support a caveat. Such a nebulous interest appears too far removed from the type of the interest that s 115(3)(a) of the LTA was originally meant to protect. But at least two cases have held that a right to be paid out of the sale proceeds of land is a caveatable interest, even where there is no duty of sale. First, in Abdul Hamid Bin Mohamed Ismail and Others v Shaik Raheem s/o Abdul Shaik Shaik Dawood and Another Action [2005] SGDC 28 (“Abdul Hamid”), the plaintiffs obtained a $20,000 loan from a licensed moneylender. The relevant terms of the loan agreement were as follows (at [7]):

[36] The district judge held that the moneylender was entitled to lodge a caveat on the plaintiffs’ property. Her reasoning merits setting out in full (at [19]–[21]):

[37] Second, in Ho Seek Yueng Novel and another v J & V Development Pte Ltd [2006] 2 SLR(R) 742 (“Novel Ho”), the owner of the defendant company (“Mr Tan”) had caused caveats to be lodged against 12 properties. He offered two bases to support the caveats. First, by way of an oral agreement, he had granted the plaintiffs a loan in respect of the sale and purchase of the properties. Second, under the same oral agreement, the plaintiffs had granted him a right of first refusal in respect of the sale and purchase of the properties. In the event that he agreed to purchase the property concerned, the loan granted to the plaintiffs in respect of the said property would be set off against the sale price; if he did not wish to purchase the property and it was sold to a third party, the loan concerned would then be repaid by the plaintiffs from the sale proceeds.

[38] The High Court accepted Mr Tan’s version of events and held that both the loan agreement and the right of first refusal independently conferred on Mr Tan a caveatable interest in the properties. Unfortunately, although the court devoted a large amount of space to explaining why the right of first refusal gave rise to a caveatable interest, there was relatively little analysis of why the loan created such an interest as well. The court simply stated as follows (at [38]–[39]):

[39] In Abdul Hamid, there was an express assignment of the future sale proceeds to the caveator. In Novel Ho, however, there was no mention of any assignment and Mr Tan’s right to the sale proceeds appears to be purely contractual in nature. The proposition that a personal right to the repayment of a debt can create a caveatable interest within the meaning of s 115(3)(a) sits uneasily with the original object and purpose of that section (which I have set out earlier). This was pointed out in William J M Ricquier, Land Law (LexisNexis, 3rd Ed, 2007) at p 127, where the learned author made the following observation on the decision in Novel Ho:

[40] Admittedly, there is a trend in our courts towards allowing non-proprietary interests to be caveated. One example is a right of first refusal (also known as a right of pre-emption). The prevailing judicial opinion is that such a right is purely contractual in nature at the time of its grant: see the survey of this area of law in Novel Ho at [51]–[56]; see also Ong Chay Tong & Sons (Pte) Ltd v Ong Hoo Eng [2009] 1 SLR(R) 305 (“Ong Chay Tong”) at [79] and [83]. However, the High Court in Novel Ho and the Court of Appeal in Ong Chay Tong have held that a right of first refusal is an interest in land that can sustain a caveat. A key rationale for this holding is that land is unique, so that certain interests in land, although not proprietary in nature, are also deserving of protection by the caveat machinery. As pointed out in Novel Ho (at [62]):

The reasoning was approved by the court in Ong Chay Tong (at [79]):

[41] But where a person is claiming an interest in the sale proceeds of land, his interest is purely monetary in nature and I can see no reason why, bearing in mind the original object and purpose of s 115(3)(a), the requirement of a proprietary interest should not apply strictly in such a case. To hold that a person with a mere contractual right to be paid from the sale proceeds of a property can lodge a caveat on that property would effectively allow such agreements to function as a form of quasi-security, since the caveatee would be unable to register dealings in respect of the property until he pays up. This is not a purpose of the caveat mechanism; a caveat is meant to protect pre-existing interests in land, not operate in and of itself as a form of quasi-security for otherwise unsecured debts. If a moneylender wishes to take security over a borrower’s property, he should take a mortgage or a charge. Moreover, it would create an anomaly whereby a creditor who has a contractual right to have a loan repaid out of the sale proceeds of property may lodge a caveat on the basis of his contractual claim, but a creditor who successfully sues the debtor on the same contract (so that his claim is extinguished by the judgment and merged into the latter) may not.

[42] This is another area of law raising difficult issues that might merit re-examination in the future. Once again, however, I need not decide them definitively because I find that the Loan Documents did not confer any legal, equitable or even contractual interest in the sale proceeds. Even if they did, any interest acquired by the Defendant has already been extinguished by the Syariah Court Order.

[43] I turn now to the issue of how the Loan Documents should be interpreted. I have already set out all the relevant terms at [6]–[7] above; there are no other terms or notes in the loan documents which say anything about a caveat or the sale proceeds of the Property. I should also mention that in the note of contract for the 2nd Loan, section I(g) titled “Details of security (if any)” was left blank.

[44] Before I go on to examine the relevant terms, it is necessary to consider several instructive cases. First, in Troncone and others v Aliperti and others (1994) 6 BPR 13,291 (“Troncone”), the Court of Appeal of New South Wales had to consider the effect of a clause (“CL5”) in a loan agreement stating: “The Debtor authorises the Creditors to lodge a Caveat on any property owned by the Debtors (sic) to protect his interest.” There was no other clause in the agreement providing for any security for the repayment of the loan. Nonetheless, the court held that CL5 was effective in creating a caveatable interest. Mahoney JA reasoned as follows (at 13,292):

[45] However, in The Asiatic Enterprises (Pte) Ltd v United Overseas Bank Ltd [1999] 3 SLR(R) 976 (“Asiatic”), the Court of Appeal held that Singapore’s LTA was different and declined to follow Troncone and other Australian authorities in the same vein. In Asiatic, the Court of Appeal had to consider the effect of the following clause (at [3]):

The court held that this clause did not create a charge or any interest in land that was capable of supporting a caveat, for the following reasons (at [28]–[29]):

Although the decision in Asiatic has been the subject of some academic criticism (see, eg, Barry Crown, “Requirement of a Pre-Existing Interest to Support a Caveat under the Land Titles Act” [2000] SJLS 341; Lee Eng Beng, “Invisible and Springing Security Interests in Corporate Insolvency Law” (2000) 12 SAcLJ 210; Victor C S Yeo, “No Security for the Unsecured Creditor” (2000) 12 SAcLJ 218), it remains the law in Singapore and I am bound by it.

[46] I should add that the force of Troncone appears to have been attenuated even in Australia. In Bellissimo v JCL Investments Pty Ltd [2009] NSWSC 1260, the Supreme Court of New South Wales had to consider the effect of the following clause (at [11]):

Despite citing Troncone and acknowledging the principle that “whoever grants a thing is deemed to grant that without which the grant itself would be of no effect” (at [12]), White J held that the clause did not give rise to a caveatable interest. He reasoned as follows (at [17], [18] and [21]):

[47] Applying the above principles, I find that neither para 6 of the Notes to the Contract nor the 2nd ACLC granted the Defendant any legal or equitable interest in the Property or in the sale proceeds thereof. In fact, the Defendant did not even acquire a contractual right to have the 2nd Loan repaid from the sale proceeds of the Property. This is because:

(a) Paragraph 6 simply states that a caveat will be lodged on the Property if payment is not prompt and removed upon completion of the loan payment. It does not say that the interest in the sale proceeds of the Property are assigned to the Defendant or to be held on trust for it. Nor is there mention of any agreement to repay the 2nd Loan out of the sale proceeds.

(b) The 2nd ACLC states that Zam authorises and consents to the lodgement of a caveat by the Defendant to secure its interest in the sale proceeds of the Property. But this presupposes that the Defendant has an interest in the sale proceeds in the first place. Since there is nothing else in the loan documents which confers on the Defendant such an interest, there is nothing for a caveat to secure. As held in Asiatic at [29], the act of lodging a caveat cannot in itself create the interest that is supposed to support the caveat.

[48] Therefore, the Defendant does not have a caveatable interest in the Property, and the Caveat ought to be removed.

[49] Even if my analysis above is incorrect and the Loan Documents were effective in conferring on the Defendant a caveatable interest in the Property, there is, in my judgment, another reason why the Caveat ought to be removed: the Defendant’s interest in the sale proceeds have been extinguished by the Syariah Court Order.

[50] Assuming that the Loan Documents granted the Defendant an interest in the sale proceeds of the Property, they could only have given the Defendant an interest in Zam’s share of the sale proceeds, since the Plaintiff did not sign the Loan Documents. The Defendant’s interest in the sale proceeds was therefore contingent on Zam being entitled to sell the Property and receive proceeds therefrom. But under the Syariah Court Order, Zam was ordered to transfer his interest in the Property to the Plaintiff for no consideration (see [10] above). Thus, a sale of the Property by Zam is no longer possible, and even if the Plaintiff decides to sell it, Zam would have no entitlement to the sale proceeds. The Defendant’s interest in the sale proceeds is correspondingly extinguished and there is no basis for allowing the Caveat to remain.

[51] In this regard, one must keep in mind that a caveat is “nothing more than [a] statutory injunction to keep the property in status quo until the court has had an opportunity of discovering what are the rights of the parties”: Alrich Development Pte Ltd v Rafiq Jumabhoy [1993] 1 SLR(R) 598 at [37]. In the present case, the Caveat has served its purpose. The Property has been kept in status quo while I considered what the rights of the parties were. As a result of this process I have found that the Defendant never had any caveatable interest in the Property or its sale proceeds, and that even if it did, this interest has since been extinguished by the Syariah Court Order. Consequently, the Caveat should be removed.

[52] Given my findings at [47] above, it follows that the Caveat also does not satisfy the formal requirements of s 115(1) of the LTA because its description (see [9] above) is erroneous. There was no agreement between the Defendant and the registered proprietors of the Property that Zam’s debt would be paid from the sale proceeds of the Property, nor does the Defendant have any equitable interest in the sale proceeds.

[53] The final issue relates to s 51 of the HDA, which provides as follows:

[54] This provision was enacted precisely to address cases like the present where a homeowner uses the sale proceeds of his HDB flat as security or collateral for a loan. As the Minister for National Development stated in Parliament (Singapore Parliamentary Debates, Official Report (19 July 2010) vol 87 at cols 723, 725–726, (Mah Bow Tan, Minister for National Development)):

[55] Section 51 of the HDA thus appears to supply a complete answer to the present case, and the Plaintiff did indeed attempt to rely on it. The spanner in the works is that it only came into force on 11 August 2010. It therefore does not affect the agreement for the 2nd Loan which was concluded on 21 October 2009. Nevertheless, as explained earlier, I have held that the Caveat should be removed for other reasons.

(a) the Caveat lodged by the Defendant against the Property be removed;

(b) the Registrar of the Supreme Court be empowered to execute any and all documents on the Defendant’s behalf to enable the Caveat to be removed; and

(c) the Defendant to be restrained from lodging further caveats against the Property in respect of the 2nd Loan.