Sunny Metal & Engineering v Lee Xin Ben: Garnishee Orders and Obligation to Stop Cheque Payment

In Sunny Metal & Engineering Pte Ltd v Jimmy Lee Xin Ben and Serangoon Gardens Country Club, the Singapore High Court dismissed the Plaintiff's appeal against the discharge of two provisional garnishee orders. The Plaintiff sought to attach sums allegedly owed by Serangoon Gardens Country Club to Jimmy Lee in satisfaction of a judgment. The court held that the Plaintiff failed to prove any debt was due or accruing from the garnishee to the judgment debtor at the time the garnishee orders were served. The court also found that a garnishee is not obliged to stop payment on a cheque issued to the judgment debtor before the garnishee order is served.

1. Case Overview

1.1 Court

High Court of Singapore

1.2 Outcome

Appeal dismissed, with costs to the garnishee.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Singapore High Court case regarding garnishee orders. The court held that the garnishee was not obligated to stop cheque payment.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Serangoon Gardens Country ClubGarnishee, RespondentAssociationAppeal DismissedWon
Sunny Metal & Engineering Pte LtdPlaintiff, AppellantCorporationAppeal DismissedLost
Jimmy Lee Xin Ben, formerly trading as Plafometal Panel SystemDefendantIndividualNeutralNeutral

3. Judges

Judge NameTitleDelivered Judgment
Audrey LimJudicial CommissionerYes

4. Counsels

Counsel NameOrganization
Toh Kok SengLee & Lee
Chua Huimin, MichelleLee & Lee
Lee Nyet Fah AlyssaAlyssa Lee & Co

4. Facts

  1. Plaintiff obtained judgment against the Defendant.
  2. Plaintiff sought to attach sums allegedly owed by SGCC to the Defendant.
  3. First Garnishee Order was issued on 2018-07-23 and served on SGCC on 2018-07-30.
  4. Second Garnishee Order was issued on 2018-08-16 and served on SGCC on 2018-08-17.
  5. SGCC had issued a cheque to the Defendant before being served with the First Garnishee Order.
  6. SGCC terminated its agreement with the Defendant before being served with the Second Garnishee Order.
  7. SGCC engaged Abdul Ghani to carry on with the August Performances.

5. Formal Citations

  1. Sunny Metal & Engineering Pte Ltd v Lee Xin Ben Jimmy (Serangoon Gardens Country Club, garnishee), Suit No 436 of 2010 (Registrar’s Appeal No 290 of 2018), [2019] SGHC 135

6. Timeline

DateEvent
First Quotation dated for performance on 2018-07-27.
Second Quotation dated for performances on 2018-08-16 and 2018-08-17.
Defendant emailed SGCC to state that his DBS account had been compromised and to ask Chew to address the cheque payment to Judy.
SGCC paid $4,600 to the Defendant in February 2018.
SGCC paid the Defendant $9,000 sometime in May 2018.
DBS Cheque dated.
DBS Cheque signed.
Defendant's performance at SGCC.
SGCC handed over the remaining $4,600 to the Defendant after the July performance, by way of the DBS Cheque.
First garnishee order served on SGCC.
DBS Cheque cleared.
Defendant informed SGCC that he would not be able to deliver the August Performances.
Defendant emailed SGCC to confirm that he agreed to the termination of his engagement, and recommended Abdul Ghani to replace him.
SGCC wrote to the Defendant to formally inform him of the termination of his contract with SGCC with immediate effect.
SGCC wrote to Abdul Ghani to confirm his appointment to manage the August Performances.
SGCC produced a cheque dated 14 August 2018 for $9,000, made in favour of Abdul Ghani.
Defendant performed as a “curtain raiser”.
Second garnishee order served on SGCC.
SGCC engaged Abdul Ghani for $9,000 and paid him on 17 August 2018.
Abdul Ghani confirmed by email on 20 September 2018 that he had received the $9,000 as payment for managing the August Performances.
Hearing date.
Hearing date.
Judgment date.

7. Legal Issues

  1. Obligation of Garnishee to Stop Payment on Cheque
    • Outcome: The court held that a garnishee is not obliged to stop payment on a cheque issued to the judgment debtor before the garnishee order is served.
    • Category: Substantive
    • Related Cases:
      • [2016] 5 SLR 372
      • (1878) 3 QBD 371
      • (1882) 19 Ch D 409
      • (1885) 1 TLR 454
      • [1983] 2 WWR 232
  2. Existence of Debt Due from Garnishee to Judgment Debtor
    • Outcome: The court found that the Plaintiff failed to prove that there was a debt due or accruing due from the garnishee to the judgment debtor at the time of the First or Second Garnishee Orders.
    • Category: Substantive
    • Related Cases:
      • [2016] 5 SLR 372

8. Remedies Sought

  1. Garnishee Order

9. Cause of Actions

  • Garnishee Proceedings

10. Practice Areas

  • Commercial Litigation

11. Industries

  • Hospitality
  • Entertainment

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
The State-Owned Company Yugoimport SDPR (also known as Jugoimport-SDPR) v Westacre Investments Inc and other appealsHigh CourtYes[2016] 5 SLR 372SingaporeCited for the legal burden on the judgment creditor to prove that there is a debt due and accruing from the garnishee to the judgment debtor.
Cohen v HaleQueen's Bench DivisionYes(1878) 3 QBD 371England and WalesCited regarding whether a garnishee who stopped payment of a cheque upon being served with a garnishee order could be enforced against the garnishee.
Re Palmer, ex parte RichdaleCourt of AppealYes(1882) 19 Ch D 409England and WalesCited regarding whether there was an obligation to stop the cheque for the benefit of a third party.
Elwell v JacksonCourt of AppealYes(1885) 1 TLR 454England and WalesCited for the principle that a debt in respect of which a cheque has been given, but not presented, is not a debt attachable under a garnishee order.
Bobell Trucking Ltd v Trin-Can Enterprises IncUnknownYes[1983] 2 WWR 232CanadaCited for the principle that where a garnishee gives to a debtor a post-dated cheque which is accepted as payment subject to the cheque being dishonoured, the debt is no longer accruing due.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

  • Garnishee Order
  • Judgment Debtor
  • Garnishee
  • Attachable Debt
  • Cheque
  • Stop Payment
  • Provisional Garnishee Order

15.2 Keywords

  • garnishee order
  • cheque
  • stop payment
  • debt
  • garnishee
  • judgment debtor
  • Singapore
  • High Court

17. Areas of Law

Area NameRelevance Score
Garnishee Proceedings95
Contract Law60
Banking and Finance40
Civil Procedure30

16. Subjects

  • Civil Procedure
  • Credit and Security
  • Banking Law