The Business Times

High Court decision reshapes earlier ruling on creditors' claim on joint bank accounts

Kelly Ng
Published Tue, Jan 19, 2021 · 05:22 PM

FOUR months after handing down a landmark judgement allowing creditors to legally seize money held in joint bank accounts under certain circumstances, the High Court ruled this month that the provisional garnishee orders it earlier granted in this case should not be executed.

The latest ruling echoes many lawyers' views in response to the earlier judgement - that it sets a high bar for invoking such orders, as it is difficult to establish a strong case that all the money in a joint account belongs solely to the debtor and not the innocent joint account holders.

In September, The Business Times reported the case brought before High Court Judge Aedit Abdullah by the plaintiff, Timing Limited, in seeking to enforce an arbitral award against two respondents, private equity firm Pacific Star Holdings and its owner, Tay Toh Hin.

After Justice Aedit granted provisional garnishee orders for four bank accounts, understood to be jointly held by Mr and his wife in name, but that "belonged to Mr Tay alone", an assistant registrar ruled at a "show-cause hearing" that final garnishee orders be granted only in the case of two of these accounts in Mr Tay's sole name.

A show-cause hearing gives the respondents an opportunity to explain to the court why it should not grant the relief that is sought.

The assistant registrar ruled that Timing had failed to show that the beneficial ownership of the entire sums held in the joint accounts belonged to Mr Tay alone. Justice Aedit dismissed its appeal against the assistant registrar's ruling.


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Among other things, he noted that Mr and Mrs Tay are a close, long-married couple who have both used these joint accounts as and when needed. The money had also been used on jointly incurred expenses, such as utility payments, telecom bills and household maintenance.

As to the frequent acts of transferring funds from their Standard Chartered account to another joint account held with DBS, Justice Aedit accepted Mrs Tay's argument that this was simply an issue of convenience - there are more DBS ATMs around.

Rebutting the appellant's counter that she could have used cashless modes of payment, the judge said: "I saw no reason why Ms Tay's payment habits should be impugned just to fit the appellant's case theory."

Also, just because Mr Tay was the one who made these transfers is not conclusive of the ownership of the funds, the judge said. "It may simply be the case that he holds the relevant cheque book," he said.

Furthermore, there were other expenses that Mrs Tay had personally taken the initiative to pay for.

On a general note, Justice Aedit said it would be unrealistic to conclude that once a joint account is used for a non-joint purpose, that act will, without more, determine the ownership of funds in the account.

While acknowledging that he had earlier accepted that Timing had established a strong prima facie case, the judge noted that this was a determination at an "interlocutory stage".

What constitutes a "strong prima facie case" at that stage may cease to be so when met with the evidence and explanations provided by the garnishee and/or joint account holder.

"A strong prima facie case is not watertight, and needs to be weighed against the evidence adduced by the respondents in determining whether or not the final garnishee order should be granted," he said.

The Latin phrase "prima facie" means "at first look" or "on its face".


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