Singaporean (common) law: seizure and sale of the membership of the Singapore Island Country Club
On 14 August 2017, the High Court of Singapore decided on the issue of whether the membership of the Singapore Island Country Club was subject to seizure and sale, in order to satisfy a court judgment to pay damages.
On 14 August 2017, the High Court of Singapore in KLW Holdings Ltd v Straitsworld Advisory Ltd (and Mr M. Chan) dealt with the question of whether the membership of a club, in this case the Singapore Island Country Club, could be subject to seizure and sale for the purpose of satisfying a court decision that ordered the defendants to pay damages. This case originated from an earlier judgment of 18 October 2016, that ordered both Straitsworld Advisory Ltd (registered in the British Virgin Islands) and its sole shareholder and director, Mr M. Chan, to pay damages to the amount of $ 7 million to KLW Holdings Ltd. When KLW Holdings Ltd discovered that Mr M. Chan was an ‘ordinary’ and ‘transferable’ member of the Singapore Island Country Club, it ‘requested that the Membership be seized and sold in satisfaction of the judgment debt’. The High Court of Singapore (S. Tan AR) formulated the question put before the court as follows: ‘The question before me is whether the Membership is property of a sort which is exigible to a writ of seizure and sale’.
Interestingly, the High Court of Singapore noted that the counsel for the plaintiff KLW Holdings Ltd, Ms A. Tan, ‘admitted that she was unable to find any reported case, whether in Singapore or in the Commonwealth, in which a writ of seizure and sale had been issued in respect of a club membership (which she admitted was “somewhat troubling”)’. However, KLW Holdings Ltd argued that, under Singaporean statutory law, ‘all the property, movable or immovable, of whatever description’ could be subject to seizure and sale, and that Singaporean case law recognised club memberships as property. The court considered that a club membership was indeed to be considered property, more precisely movable property (‘proprietary interests which do not relate to land’) rather than immovable property (‘proprietary interests relating to land’). At the same time, as further point, the court considered that KLW Holdings Ltd still had ‘to show that the Membership is property of a sort which is exigible to a writ of seizure and sale’. As concerns the latter issue, the court considered on the one hand that ‘there is force to Ms Tan’s argument that a transferable club membership, particularly one at the SICC, is a highly marketable luxury good which should be capable of being taken and sold in execution. This would comport with modern reality, where intangible personal property has become the principal repository of wealth in the twenty-first century’. But the court considered on the other hand that there are cases in which seizure ‘will be of limited utility because it does not result in the (immediate) monetisation of the Membership’. The case at hand was such a case, taking into account the internal rules applied by the Singapore Island Country Club itself. In the words of the High Court of Singapore: ‘Even if the Membership can be “seized” in some way, it cannot be transferred until the approval of the General Committee of the SICC is first sought and obtained’. This meant that a sale of the club membership, following its seizure, might turn out to be a disappointment for the prospective member, as he (or she) would not be sure if he (or she) would be admitted as a member.
For these reasons, the High Court of Singapore denied the request by KLW Holdings Ltd for the seizure and sale of the membership of the Singapore Island Country Club to satisfy the judgment against (Straitsworld Advisory Ltd and) Mr M. Chan to pay damages to KLW Holdings Ltd.
The judgment of the High of Singapore can be found at: www.singaporelaw.sg, laws of Singapore, case law, free law (High Court judgments).