Judgment

[Please note that this case has not been edited in accordance with the current Singapore Law Reports house style.]

Judgment reserved.

Michael Hwang JC:

1           Can a district court grant a bare declaration? This is a question on which there is apparently no reported authority and, as there are conflicting views on this issue, I have to deal with it as fully as possible.

2           But first, the facts of this appeal. This is a story of a fraudster who has cheated several innocent parties resulting in financial losses of varying degrees. The burden on me, however, is not so much to apportion the losses between the innocent parties, but to deal with a situation where the issues between the parties to this case have changed, from the time when the suit was first commenced to the time that the matter was heard in the district court, and again before me on appeal, raising at this stage a fundamental question as to the source of the jurisdiction of the district courts.

3           The respondent (whom I will call ‘the seller’) wished to sell his Mitsubishi Lancer No EZ 8954 Z and to buy a new Toyota Corona for his wife. Billy Tan, a fraudster, was introduced to the seller and his wife as a person who could handle both these transactions. Billy Tan met the couple at the Colombo Court taxi stand where he inspected the Lancer. He offered to buy it for $28,500 and agreed to help the couple to buy a new Toyota Corona for $29,500 as well as to get them a scrap car. Billy Tan paid the seller $1,000 as a deposit for the Lancer. The arrangement was that delivery of the Lancer would be given to him when the new Toyota arrived, and the balance of the price of the Lancer would be set off against the purchase price for the Toyota. At some point, as the understanding was apparently that he would pay the purchase price for the Toyota to the car dealers, a cheque for $14,500 was also given to him for the scrap car.

4           Billy Tan offered to assist the couple with the renewal of the road tax for the Lancer, and the logbook was given to him together with a cheque for the road tax. The logbook was never returned, as the seller was content to allow Billy Tan to retain it pending completion of the sale. Billy Tan also borrowed the seller’s identity card on some pretext, but this was returned. The Lancer never left the seller’s possession.

5           Shortly after the meeting with the seller and his wife, Billy Tan entered into an agreement with the appellant (whom I will call ‘the buyer’) to sell him a car for $26,500. Billy Tan showed him a Mitsubishi Lancer bearing the number plate EZ 8954 Z (the same registration number as the seller’s Lancer). The buyer agreed to purchase the car and paid him $5,500 as an initial payment. Billy Tan was able to arrange for the buyer to purchase the car on hire purchase through Sime Diamond Leasing (S) Pte Ltd (whom I will call ‘the finance company’). The buyer paid one instalment to Billy Tan (purportedly under the hire purchase agreement), but the car was never delivered to him. It subsequently transpired that Billy Tan, on the day that he borrowed the seller’s identity card, forged the seller’s signature on a motor vehicle transfer form. As the logbook of the Lancer was in his possession, he was able to effect a transfer in the Registry of Vehicles from the seller’s name into the name of the buyer.

6           Billy Tan then absconded, leaving the parties in the following situation:

(1)    The seller still retained possession of the Lancer, but had not been paid the balance of the purchase price, nor had he received the new Toyota. He also did not have the scrap car for which he had paid Billy Tan.

(2)    The finance company had nominally purchased the car bearing the particulars of the seller’s Lancer, and had entered into a hire-purchase agreement with the buyer in respect of this car. It also held the logbook of the seller’s Lancer.

(3)    The buyer had paid an initial down payment and one instalment under the hire-purchase agreement, but had no car.

7           When the truth of the matter emerged, the seller sued the buyer for the following reliefs:

(a)       a declaration that the transfer of the seller’s Lancer to the buyer by the seller was null and void; and

(b)      an order that the Registry of Vehicles be directed to rectify its records to reflect the seller as the registered owner of the seller’s Lancer.

8           The buyer resisted the claim and counterclaimed for possession of the car. The finance company obtained an order of court allowing it to be added to this action as an intervener, but filed no document in court stating the nature of its interest. After the action was commenced, and before the trial, the three parties entered into ‘without prejudice’ discussions with a view to disposing of the car. The terms upon which the parties eventually reached agreement for the sale do not appear in the record of appeal, and it is therefore unclear on what legal basis the parties agreed that the car should be sold. Although copies of the correspondence between the three parties were shown to me, I am reluctant to make any finding on the basis of the correspondence, as counsel for the buyer (who was not acting at the material time) did not know the background to these letters and the solicitors for the finance company were not present at the hearing of the appeal before me. However, all three parties had to be involved in order to sell the vehicle, and it is not in dispute that the car was in fact sold and the proceeds of the sale held by the solicitors for the finance company as stakeholders pending the outcome of the action. It is also not clear what exactly the trial judge was told about the sale. The notes of evidence only record that, half way through the proceedings, the seller’s counsel informed the court that the car was sold and that the solicitors for the finance company were holding the money as stakeholders.

9           At the trial, the seller’s statement of claim was amended. The seller’s position at the trial was that title to the car never passed from the seller to Billy Tan, who accordingly could not give title to the buyer. The buyer’s defence was that the seller had sold the car to Billy Tan and/or authorized Billy Tan to sell the car on his behalf. The buyer also pleaded estoppel. No amendments were, however, made to the pleadings to reflect that the action was no longer about the car but about the proceeds of sale. I will return to the significance of this later.

10       The learned district judge found as a fact that the buyer bought from Billy Tan what he had seen. Although the car that the buyer saw bore the same number as the seller’s car, the learned district judge found that it was not in fact the seller’s car that he had seen, since it was of a different colour from the seller’s car and the seller’s evidence was that he had never parted with possession of his car. Accordingly, the buyer had not purchased the seller’s car.

11       The district judge went on to consider the buyer’s reliance on s 21 of the English Sale of Goods Act 1979. In that context, the learned district judge made the following findings:

(1)    When Billy Tan entered into his agreement with the seller to purchase the seller’s car, he became its owner.

(2)    Billy Tan had the seller’s authority or consent to sell the car.

(3)    There was no estoppel even though the seller had handed over the logbook and his identity card to Billy Tan because the buyer had never asked for, and was not shown, the logbook and the identity card.

12       The learned district judge then granted the following reliefs:

(a)       he granted the declaration sought by the seller that the transfer of motor car EZ 8954 Z from the buyer to the plaintiff was null and void;

(b)      he ordered that the proceeds of sale of the car be paid by the stakeholders to the seller;

(c)       he made no order as to interest on the proceeds of sale;

(d)      he dismissed the counterclaim; and

(e)       he awarded costs in favour of the seller.

13       The buyer now appeals against these orders. Although various grounds were advanced in the petition of appeal, the buyer’s counsel who appeared before me (who was not counsel in the court below) based his appeal only on three grounds:

(1)    The learned district judge had no jurisdiction to grant a bare declaration.

(2)    Since the learned district judge had found that the property in the car had passed to Billy Tan, he should not have granted the declaration asked for in any event because the seller was no longer the owner but only had a lien for the unpaid purchase price.

(3)    The buyer and Billy Tan had made a contract for the sale of the seller’s car; whether the seller had parted with possession of the car was inconsequential. Accordingly the buyer should be entitled to the proceeds of sale.

14       I will deal with the last point first because it is the simplest. The buyer’s counsel sought to argue that it was a proper inference from the evidence that what the buyer had agreed to purchase was not the car that was shown to him but a car bearing the number EZ 8954 Z, namely, the seller’s car. This was the only way in which counsel could establish the buyer’s rights to the proceeds of sale, since he conceded that he did not seek to challenge the finding of the learned district judge that the buyer never saw the seller’s car, nor did he rely on the ground of estoppel.

15       I have no difficulty in rejecting this ground of appeal, as the evidence of the buyer did not show that he placed any importance on the registration number of the car as such. On the facts, it is clear that he was buying the car which he had seen, which was not shown to him as a sample but as the actual car he was to purchase.

16       After I had indicated to counsel for the buyer in the course of argument that I did not accept this submission, he then submitted that his alternative claim for relief in this appeal was that the learned district judge was wrong in granting the declaration and should have dismissed both the claim as well as the counterclaim for the reasons set out in his first two grounds of appeal, to which I now turn.

The power of the district courts to grant a bare declaration

17       The buyer’s counsel’s first ground of appeal raises a matter of general interest and importance. Although this point was apparently not taken in the court below, an objection as to jurisdiction can be taken at any time during the case (see Westminster Bank Ltd & Anor v Edwards & Anor). Counsel submitted that, in general, courts have no power to grant a bare declaration unless it is given jurisdiction to do so by statute, and referred to Lawrence Au Poh Weng & Anor v Annie Tan Huay Lian and Tunku Mahmoud bin Sultan Ali & Ors v Tunku Ali bin Tunku Allum & Ors. In the High Court bare declarations are granted on the authority of O 15 r 16 of the Rules of the Supreme Court 1970 (‘the RSC’). However, there is no equivalent of this rule in the Subordinate Courts Rules 1986 (‘the SCR’), and he therefore contended that the learned district judge erred in granting the declaration prayed for.

18       Counsel for the seller referred me to s 32 of the Subordinate Courts Act (Cap 321)(‘the Act’) which provides:

Ancillary Jurisdiction

A District Court, as regards any action within its jurisdiction, shall in any proceedings before it —

(a)          grant such relief, redress or remedy or combination of remedies, either absolute or conditional; and

(b)          give such and the like effect to every ground of defence or counterclaim equitable or legal (subject to section 24),

as ought to be granted or given in the like action by the High Court and in as full and ample a manner.

19       He also relied on s 19(2) of the Act, which sets out the general civil jurisdiction of the district courts, and submitted that all three conditions set out in that subsection were fulfilled in this case. Counsel further pointed out that, although there is no direct equivalent of O 15 r 16 of the RSC in the SCR, O 1 r 2(4) of the SCR provides:

In any matter of procedure or practice not provided for in these Rules, the procedure and practice for the time being in use or in force in the Supreme Court shall, as near as may be, be followed and adopted.

20       The thrust of counsel’s argument was therefore that s 19(2) conferred jurisdiction on the learned district judge to hear this case; once he had jurisdiction, s 32 empowered him to grant the same relief as a High Court judge could.

21       As this is a question of some importance, I have had to make my own researches into the matter, but have given counsel an opportunity to comment on the further authorities which I have found.

22       Before proceeding with my examination of this issue, it is necessary to be clear about the ways in which the term ‘jurisdiction’ is used (and abused). Unfortunately, judges and parliamentary drafters have from time to time used the term ‘jurisdiction’ to mean both:

(a)       the authority of a court or judge to entertain an action or other proceeding, as well as

(b)      the power of the court to grant the particular kind of relief sought.

(See, for example, the remarks of Diplock LJ in Garthwaite v Garthwaite at p 387 and Oscroft v Benabo at p 557). For the sake of clarity in this judgment, I will only use the term ‘jurisdiction’ to mean the authority of a court to hear an action, and the term ‘power’ to refer to the power of a court to grant the relief claimed.

23       The distinction between the two concepts has been well pointed out by Ong J in KI Muhiudeen Rawther v KEP Abdul Kassim & Ors at p 258. The Supreme Court of Judicature Act (Cap 322) observes this distinction: ss 16 and 17 deal with the civil jurisdiction of the High Court (in the sense of authority to hear civil cases) and s 18 deals with the powers of the High Court to grant particular reliefs. The marginal note for s 32 of the Subordinate Courts Act (‘ancillary jurisdiction’) is therefore a misleading term, because that section really deals with powers and not jurisdiction, which is covered by s 19(2) and other sections in Pt IV.

24       The argument of the seller’s counsel rests strongly on s 32 of the Subordinate Courts Act. That section cannot be understood without reference to s 20 which provides :

Jurisdiction in actions of contract and tort

(1)    A District Court shall have jurisdiction to try any action founded on contract or tort where the debt, demand or damage claimed does not exceed $50,000, whether on balance of account or otherwise.

(2) A District Court shall have jurisdiction to try any action where the debt or demand claimed consists of a balance not exceeding $50,000 after a set-off of any debt or demand claimed or recoverable by the defendant from the plaintiff, being a set-off admitted by the plaintiff in the particulars of his claim or demand.

25       Both ss 20 and 32 have their equivalents in the English County Courts Act 1959. Our s 20(1) is in similar terms to the English s 39, and our s 32 is in similar terms to the English s 74. There is substantial case law on the interpretation of the English s 74, and the net effect of these authorities is set out in 10 Halsbury’s Laws of England (4th Ed) para 59:

A declaration is an ancillary remedy which, like an injunction, cannot be granted by a county court in the absence of a claim to money or other relief within the court’s substantive jurisdiction unless provided for by statute.

26       There is a long line of cases establishing this proposition: R v Cheshire County Court Judge and United Society of Boilermakers, ex p Malone; De Vries v Smallridge; Humber Conservancy Board v Federated Coal and Shipping Co Ltd; Kenny v Preen; Wong v Beaumont Property Trust Ltd; and Thompson v White. (See also The County Court Practice 1983 at p 26.)

27       The interpretation given to the English s 74 by the courts has been criticized by Dr Itzhak Zamir in The Declaratory Judgment (1st Ed, 1962) at pp 304–307 but it appears too well entrenched to be capable of challenge.

28       In all these cases, however, the courts have discussed the interpretation of s 74 of the County Courts Act, not in isolation, but in relation to other sections of that Act. The reason for this is explained by Dr Itzhak Zamir in his book (at pp 300– 301):

The jurisdiction of the county court is wholly statutory. Hence, the question whether declaratory relief may be granted by these courts is to be answered by reference to statutory provisions. Among the relevant provisions, however, there is none which expressly states, as O 25 r 5 [equivalent to O 15 r 16 of the Singapore RSC] does in respect of proceedings in the High Court, that pure declaratory relief is available in county courts. The answer, therefore, is to be given by interpretation of the provisions prescribing the jurisdiction of these courts.

29       For this reason, since s 74 is not a section which confers jurisdiction as such on the county courts, but is a section which prescribes the powers of the courts, it can only be invoked where the action is otherwise within the jurisdiction of the county courts. There is no rule that a bare declaration as such cannot be granted by a county court. Where a county court otherwise has jurisdiction by virtue of another section of the County Courts Act, it may grant the declaratory relief even if that is the only relief claimed (see, for example, Gascoigne v Gascoigne and Re Thomas (deceased); Davies & Ors v Davies & Anor; see also 10 Halsbury’s Laws of England (4th Ed) para 59, fn 1). In the cases where declaratory relief has been denied in the county courts, these denials were where there was no claim falling under another section of the County Courts Act conferring jurisdiction, or where the court felt that the prayer for a declaration was not truly ancillary to such a claim.

30       In Singapore, the jurisdiction of the district courts is likewise wholly statutory. The main difference between the jurisdiction of the district courts and that of the English county courts is that there is no English equivalent of s 19(2) of the Subordinate Courts Act which provides :

General civil jurisdiction

(2)          Subject to the provisions of this Act and any other written law which relate to the limitation of the civil jurisdiction of a District Court, a District Court shall have jurisdiction to try all civil proceedings where—

(a)     the cause of action arose in Singapore;

(b)     the defendant or one of several defendants resides or has his place of business or has property in Singapore; or

(c)     the facts on which the proceedings are based exist or are alleged to have occurred in Singapore. (Emphasis added.)

31       This appears at first sight to be a self-sufficient section conferring original civil jurisdiction on district courts in Singapore subject only to the limitations mentioned in italics. This section is substantially similar to s 16(1) of the Supreme Court of Judicature Act except that :

(a)       unlike the High Court, district courts do not have power to try proceedings relating to land; and

(b)      the jurisdiction of district courts is limited by the other provisions of the Subordinate Courts Act and any other written law.

32       Thus, an argument can be made that, unless a statutory provision can be found which limits the jurisdiction of the district courts, they will have jurisdiction to try any civil proceedings where any of the three conditions set out in s 19(2) is satisfied. This was in effect the argument put forward by counsel for the seller (although not quite in those terms), and I must now develop this argument and examine it critically. Although this was not a point made by counsel, this argument means that s 20 of the Subordinate Courts Act and the other sections in Pt IV referring to monetary limits on jurisdiction are not to be treated as provisions conferring jurisdiction, but rather as provisions limiting jurisdiction.

33       For the sake of clarity and convenience, I will divide the sections in Pt IV which deal with the original civil jurisdiction of district courts into two classes :

(a)       ss 20, 21, 25, 28, 29, 30 and 31, which I will call ‘the primary jurisdiction sections’ as they set out monetary limits for specific classes of actions; and

(b)      ss 22, 23, 24(3), 26 and 27(3), which I will call ‘the additional jurisdiction sections’ as they allow district courts to hear cases not otherwise falling within the primary jurisdiction sections.

34       The primary jurisdiction sections appear to confer jurisdiction on district courts up to specified financial limits, but should (on the foregoing argument) be construed as provisions which in fact limit jurisdiction. In other words, the first inquiry as to jurisdiction will be to ask whether one of the conditions in s 19(2) is satisfied. If so, the next inquiry will be to ask whether the action is one of contract, tort or any of the other classes of action mentioned in the primary jurisdiction sections. If so, the jurisdiction of the district courts will be governed by the financial limits set by those sections. If not, a district court will have jurisdiction to hear the case without financial limits on its powers. The additional jurisdiction sections merely extend the limits contained in the primary jurisdiction sections in exceptional circumstances.

35       On this basis, s 32 of the Subordinate Courts Act could then be read somewhat differently from s 74 of the County Courts Act. It could be argued that, so long as the case before a district court is not one to which any of the primary jurisdiction sections of Pt IV would apply to exclude the jurisdiction of a district court, it will have jurisdiction to hear the action and, in such case, it may (pursuant to s 32) grant the same reliefs that the High Court could grant in an equivalent case. It cannot be doubted that the High Court has power to grant a bare declaration in an appropriate case, the authority for this being generally accepted as O 15 r 16 of the RSC (see Guaranty Trust Co of New York v Hannay & Co). Accordingly, district courts would likewise have power to grant a bare declaration.

36       This approach has the attraction of consistency of interpretation between s 19(2) of the Subordinate Courts Act and s 16(1) of the Supreme Court of Judicature Act. This is, however, not an interpretation which has been commonly accepted in the past, as the general view in the legal profession appears to be that, even if one of the conditions in s 19(2) is satisfied, district courts will only have jurisdiction if the case falls within one of the primary or additional jurisdiction sections in Pt IV. If the broad-ranging interpretation that I have suggested for s 19(2) is to be adopted, the practical consequences are that a district court would have jurisdiction to hear any class of case which is not specifically mentioned in Pt IV. Furthermore, in those cases it would, by virtue of s 32, have no financial or other limits on its jurisdiction, so that it could award monetary relief in excess of $50,000. The following classes of cases might be examples (by no means exhaustive) where district courts would have such unlimited jurisdiction:

(a)       actions in quasi-contract;

(b)      actions for infringement of trademark rights or breach of copyright (unless such actions are to be regarded as claims in tort within the meaning of s 20(1));

(c)       actions for damages for breach of trust or fiduciary obligation or breach of confidence (unless such actions are also to be treated as claims in tort);

(d)      actions to enforce foreign judgments at common law;

(e)       actions for repayment of moneys procured by undue influence; and

(f)        other claims for compensation based on equitable rights.

37       These are all cases where there are no express limitations placed on the jurisdiction of the district courts by any provision of the Subordinate Courts Act or of any other written law. Therefore, on the interpretation I have postulated, so long as the requirements of s 19(2) are satisfied, a district court will have jurisdiction to hear the case and may, under s 32, grant all such reliefs as the High Court is empowered to grant. Indeed, taken to its logical conclusion, this interpretation would even allow the district courts unlimited jurisdiction to hear claims for certiorari, mandamus and prohibition, if the requirements of s 19(2) are satisfied.

38       Such a situation would of course result in duplicity of jurisdiction between the High Court and the district courts in the examples I have given (although this problem could possibly be overcome by liberal use of the procedure for transfer of a district court action to the High Court under s 39 of the Subordinate Courts Act). However, the real anomaly of such a situation would be that the district courts would, for no apparent logical or practical reason, have unlimited monetary and other powers in certain classes of cases which are generally more complex than the cases falling within the primary jurisdiction sections.

39       On a consideration of the structure of the Subordinate Courts Act as a whole (particularly Pt IV), it seems to me that it was not the intention of the drafter to create such a radical difference between the jurisdiction of the district courts and that of the English county courts. If this had been so intended, I believe that clearer language would have been used, and we would not have been put in a situation where to give s 19(2) its literal meaning would result in the district courts having jurisdiction in so many cases involving sums well over $50,000 for no apparent reason.

40       I am fortified in this belief by my analysis of the recent history of the civil jurisdiction of the district courts and I have been assisted in this analysis by Associate Professor Leong Wai Kum’s article ‘The High Court’s Inherent Power to Grant Declarations of Marital Status’ in [1991] SJLS 13. Although the jurisdiction extends as far back as the beginning of the century, the terms in which this jurisdiction was expressed have been fairly consistent up till the enactment of the present Subordinate Courts Act in 1970. Immediately prior to that enactment, the jurisdiction of the district courts was found in s 58(1) of the Courts Ordinance (Cap 3, 1955 Ed) which provided :

Civil Jurisdiction of District Courts

Subject to the other provisions of this Ordinance, a District Court shall, when presided over by a District Judge, have jurisdiction to try all original actions and proceedings of a civil nature of which the amount in dispute or value of the subject matter does not exceed one thousand dollars:

Provided that—

(a)          the cause of action has arisen either wholly or in part within the Colony; or

(b)          the defendant, or any one of the defendants, at the time of institution of the action or suit ordinarily resides or carries on business or personally works for gain within the Colony.

41       Section 67 of the same Ordinance provided that district courts would have no jurisdiction in actions for declaratory decrees (except in interpleader proceedings).

42       The following points will be noted about the Courts Ordinance:

(a)       s 58(1) brought together in one provision all the conditions precedent for jurisdiction;

(b)      s 58(1) comprised two parts, the first setting out the financial limits of the district courts’ jurisdiction and the second setting out the necessary connection with Singapore to justify invoking the jurisdiction of the district courts;

(c)       the first part extended the civil jurisdiction of the district courts to all kinds of civil proceedings subject only to the financial limit of $1,000 (and I will call this element ‘the financial limits’), unlike the present statute, which appears to give jurisdiction only in certain classes of cases, and also subject to fixed financial limits;

(d)      the second part was drafted in broadly similar terms to s 19(2) of the present statute (and I will call this element ‘the geographical connection’);

(e)       s 67 made it plain that no declaratory relief could be granted on any basis except in interpleader proceedings.

43       It is therefore clear that, if the seller’s claim had been brought under the Courts Ordinance, he would have been denied relief.

44       These sections remained in force during the period that Singapore was part of Malaysia (with some minor amendments being made). The Ordinance itself was renamed the Subordinate Courts Ordinance when the other parts of the Ordinance were repealed and new legislation for the superior courts in Singapore was enacted in the form of the Malaysian Courts of Judicature Act 1964. The Subordinate Courts Ordinance was eventually replaced by the present statute (enacted as the Subordinate Courts Act 1970), when s 19(2) and the primary and additional jurisdiction sections emerged in their present form (albeit with lower monetary limits).

45       Without actual knowledge of how the present statute came to be drafted, I can only surmise that the drafter decided to use the English County Courts Act as a model for what was going to be the first statute to be drafted dealing exclusively with the jurisdiction and powers of the subordinate courts. This is apparent from the primary and additional jurisdiction sections in Pt IV which, generally speaking, follow closely the wording of the equivalent sections of the County Courts Act. However, as the Supreme Court of Judicature Act had been enacted in 1969 with s 16 as the general jurisdiction-conferring section, the drafter presumably thought it sensible to engraft a version of that section onto the English model, possibly to fulfil the same function as the proviso to the old s 58(1), namely, the geographical connection. It certainly appears from a comparison of the Courts Ordinance and the Subordinate Courts Act that the drafter of the latter was trying to keep the necessary elements for the jurisdiction of the district courts broadly similar to what they had been in the Ordinance by retaining the dual elements of (a) financial limits and (b) geographical connection which were both present in the Courts Ordinance; the new Act might therefore be regarded as a refinement of the old regime.

46       Against that background, I feel that I am able to invoke the well-known presumption that a statute does not create new jurisdictions or enlarge existing ones, and express language is required if a statute is to be interpreted as having this effect (see Maxwell on Interpretation of Statutes (12th Ed, 1969) p 159). I concede that I may be stretching the presumption somewhat since the language of the Subordinate Courts Act is quite different from that of the Courts Ordinance, and the presumption is usually applied to superior rather than inferior courts (see Craies on Statute Law (7th Ed, 1971) at p 122). However, I cannot imagine that the drafter (or the legislature) intended to replace s 58(1) (containing the dual elements of financial limits and geographical connection) by s 19(2) (containing only the geographical connection) as the sole criterion for jurisdiction independently of the other primary jurisdiction sections in Pt IV (containing the financial limits). It is much more likely that he was trying to do in two or more sections what the Courts Ordinance had done in one; unfortunately he did not realize that he could not make fried eggs out of an omelette. In fact, the whole structure of Pt IV is more restrictive in terms of jurisdiction than the Courts Ordinance, because the primary jurisdiction sections are selective in terms of subject matter whereas s 58(1) granted district courts jurisdiction to hear every kind of civil proceeding, the only limitation being the amount claimed or the value of the subject matter in dispute. There is therefore no reason to suppose that the Act was intended significantly to enlarge the jurisdiction of the district courts.

47       The only reason for arguing that the primary jurisdiction sections in the Subordinate Courts Act should be construed differently from the equivalent sections in the County Courts Act is the effect of s 19(2) of the Subordinate Courts Act. Let me now examine the problem with regard to s 19(2). Section 16(1) of the Supreme Court of Judicature Act is usually regarded as the general source of authority for the High Court to try civil cases apart from the other more specific provisions of ss 16 and 17. In any dispute as to the jurisdiction of the High Court to try a particular civil case, if the case falls within s 16(1), there will be no need to rely on any other provision. If a similar interpretation were to be given to s 19(2) of the Subordinate Courts Act (subject to the financial limits for those classes of cases mentioned in the primary jurisdiction sections), it would result (as I have observed) in cases apparently falling within the jurisdiction of the district court which could not have been contemplated by the legislature. On the other hand, if, apart from s 19(2), the other provisions of Pt IV are to be regarded as sections conferring jurisdiction and not limiting it, then what effect is to be given to s 19(2)?

48       It seems to me that, however unsatisfactory this may prove in terms of logic and consistency, s 19(2) must be treated as a necessary but not a sufficient condition precedent for jurisdiction. In other words, one of the conditions in s 19(2) must be satisfied for a district court to have jurisdiction but, even if the case falls within s 19(2), it will also have to fall within one of the primary or additional jurisdiction sections in Pt IV (which would therefore have to be treated as sections conferring jurisdiction rather than as sections limiting it) in order that a district court may be seised of the case. Such an interpretation may appear illogical and inconsistent, but I can offer three arguments in support of preferring such an interpretation.

(1)    The High Court is a superior court whereas a district court is an inferior court. No matter is deemed to be beyond the jurisdiction of a superior court unless it is shown to be so, while nothing is within the jurisdiction of an inferior court unless it is expressly shown on the face of the proceedings that the particular matter is within the cognizance of the particular court (see 10 Halsbury’s Laws of England (4th Ed) para 713). The rules of interpretation of the jurisdiction of a superior court are therefore somewhat different from those of an inferior court.

(2)    The fact that the primary jurisdiction sections in Pt IV have followed the wording of the equivalent sections in the English County Courts Act so closely suggests that the true intention of the legislature was that the primary jurisdiction sections in the Subordinate Courts Act should be construed  in the same way as their English counterparts, and it is clear that the English sections have always been interpreted as sections conferring jurisdiction.

(3)    The history of the legislation enables me to invoke the presumption against enlargement of jurisdiction, particularly where to do so would raise even greater illogicality and inconsistency than if I were to adopt a common interpretation for s 16(1) and s 19(2).

49       I have considered a third possible interpretation of Pt IV. This would be to regard s 19(2) as the sole section setting out the necessary requirements for district courts to assume jurisdiction, and the primary and additional jurisdiction sections would then be regarded as sections setting out the powers of the district courts in cases where there is jurisdiction under s 19(2). If therefore cases arose where s 19(2) could be satisfied, but the case was not one coming within the primary or additional jurisdiction sections (for example, actions in quasi-contract or for equitable compensation), a district court would theoretically have jurisdiction to hear the case but no power to grant any relief, which would effectively mean that such cases could not be heard by district courts. I do not think that this is a viable interpretation for the following reasons:

(a)       The primary and additional jurisdiction sections are explicit in their use of the term ‘jurisdiction’ (‘shall have jurisdiction to try any action’) and to read them as sections dealing with powers would require considerable distortion of language.

(b)      The primary and additional jurisdiction sections follow closely the wording of equivalent sections in the County Courts Act which have always been construed as sections dealing with jurisdiction and not powers.

(c)       If the primary and additional jurisdiction sections are to be regarded as dealing with powers, then they would conflict with s 32, and indeed be redundant by reason of that section. Section 32 clearly deals with powers, and states unequivocally that, where a district court has jurisdiction, it has all the powers of the High Court without limitation. If jurisdiction is determined solely by s 19(2), and s 32 gives district courts all the powers of the High Court, what need would there be for the primary and additional jurisdiction sections?

50       Having regard to the foregoing analysis, I would readily agree that Pt IV of the Subordinate Courts Act should be redrafted for clarification. However, I believe that, in all the circumstances, I would be in tune with the intention of the legislature in holding that the civil jurisdiction of the district courts requires a two-fold test, namely, that a case must fall, not only within s 19(2), but also within another section in Pt IV conferring jurisdiction, namely, one of the primary or additional jurisdiction sections. In other words, as in the Courts Ordinance, the case must meet both the geographical connection and the financial limits before a district court can have jurisdiction.

51       It follows from this that I ought to apply the same interpretation given to s 32 as has been given to s 74 of the English County Courts Act, namely, that there can be no claim for a bare declaration unless it is ancillary to some other monetary or other claim falling properly within the jurisdiction of the district courts. Although it is not disputed that the requirements of s 19(2) have been met in this case, since the plaintiff claimed no relief which would otherwise have come within a section in Pt IV conferring jurisdiction (other than s 32), I conclude that the declaration should not have been granted.

52       The seller’s position is not improved by his second claim (which was abandoned at trial) for an order for rectification of the register in the Registry of Vehicles. This order could not in any event have been granted, since there is no provision for such an order in the Road Traffic Act (Cap 276), there being no equivalent in that statute of s 143 of the Land Titles Act (Cap 157).

53       Counsel for the seller, in a fall-back argument, submitted that the seller’s claim was capable of being treated as a latent claim for damages for conversion, so as to make his claim for a declaration ancillary to a claim falling within one of the primary jurisdiction sections (presumably s 20(1)), citing Goh Lam Wah v Elsa Yeo. I cannot agree with this submission since there was in fact no claim for damages and, as Lord Denning MR said in Wong v Beaumont Property Trust Ltd (at p 182): ‘It is the nature of the claim which founds the jurisdiction, not the result of the case.’

Should the declaration have been granted?

54       However, in the event that I am wrong in this interpretation, I now turn to the second ground of appeal, which is that, even assuming that the court could have granted a declaration, the learned district judge should not have done so in the circumstances of this case. In this respect, I believe that the buyer’s counsel has raised an issue which was not appreciated by the parties below. If, as the district judge found, title had passed from the seller to Billy Tan, then the position of the seller became that of an unpaid seller with a lien over the property for the unpaid balance of the purchase price pursuant to s 39(1)(a) of the Sale of Goods Act 1979. As such, the seller could have exercised his rights of sale as lien-holder but, as I have already observed earlier, it is by no means clear that this was in fact the basis for the sale. Counsel for the buyer both in the court below as well as before me advanced the argument that the agreement between the seller and Billy Tan was not a sale pursuant to s 2(3) but an agreement for sale pursuant to s 2(4) of the Sale of Goods Act. I will return to this argument later, but the immediate point is that, if that had been the seller’s position throughout, then he could not have sold the car as lien-holder but must have done so pursuant to a title which the learned district judge has found did not exist after the meeting at Colombo Court, when the agreement between the seller and Billy Tan was struck. Furthermore, if the seller were a lien-holder, he would have lost that lien by the sale, and his only right to the proceeds of sale would be if he had reserved his right to claim as a lien-holder rather than as the owner of the car, as to which there is no evidence.

55       These difficulties were not perceived in the court below, apparently because the point of the lien was never argued. Nonetheless, that is the position that faces me in this appeal. The only way (if at all) in which I can uphold the actual order for payment of the sale proceeds to the seller made by the district judge is if I accept the argument of counsel for the seller that the contract between the seller and Billy Tan amounted to an agreement for sale and not a contract of sale. The difference between these two types of contract is that, in an unconditional contract of sale in relation to specific goods in a deliverable state, the prima facie presumption is that property passes at the time of contract unless there is evidence that the parties had expressly or impliedly agreed otherwise (see s 18 r 1). In an agreement for sale, however, the parties have agreed on the sale, but title will not pass until a future time or until a specific condition has been fulfilled, for example, payment of the purchase price (see s 2(5)). There are many cases illustrating how one is to distinguish one situation from the other and I am mindful of the remarks of Diplock LJ in RV Ward Ltd v Bignall at p 545 : ‘... in modern times very little is needed to give rise to the inference that the property in specific goods is to pass only on delivery or payment’.

56       I have reviewed several cases on either side of the line, but have found that each case turned on its own facts, so that the particular circumstances of each transaction affected the court’s view of the nature of the agreement reached in that case. Accordingly, the decision in the present case must be essentially one of fact. The learned district judge, having had the benefit of seeing the witnesses, has made a finding that property passed from the seller to Billy Tan at the time the contract was made. There is ample support for his finding in the following extracts from the notes of evidence:

Evidence of seller’s wife

Examination-in-chief

Condition of sale of EZ 8954 was that I would give him the car only when new car is given to me and after off-setting what is due on the new car. (Record of appeal at p 21.)

Cross-examination

The agreement was that I would hand over the old car only when the new car was given to me. (Record of appeal at p 32.) I have already sold it to Billy for $28,500. He paid me $1,000. There was already a contract between me and Billy. (Record of appeal at p 32.)

Re-examination

I agreed to sell the car to Billy on condition that he delivers the new Toyota to me and that he pays me the sale proceeds of my old car after deducting whatever was still due to Borneo Motors. (Record of appeal at p 33.)

Evidence of seller

Examination-in-chief

Billy would buy the car at $28,500 and would formalize everything when the new car came. That was the understanding. (Record of appeal at p 34.)

Cross-examination

What is correct is that we sold the car to Billy for $28,500. He would pay $1,000 and pay $27,500 to Borneo Motors for the new car. (Record of appeal at p 38.)

Q : I  f you had signed the transfer form, then the ownership would have passed?

A :          Yes. (Record of appeal at p 42.)

Re-examination

I have already sold the car to Billy. What he does with it is his business. (Record of appeal at p 43.) (Emphasis added.)

57       Although I take into account that lay people may not appreciate the subtle distinction between the transfer of property and the delivery of possession, I think the overall flavour of the extracts quoted from the evidence (particularly the words in italics) shows a willingness by the seller to let the prima facie rule apply, namely, that property would pass when the deal was struck but that the seller would retain possession until the price was paid.

58       I also have to bear in mind the duties of an appellate court when reviewing the findings of fact of a trial judge. The seller’s counsel has referred me to the wellknown decision in Benmax v Austin Motor Co Ltd, to which I would add the various authorities mentioned in my judgment in Tay Ivy v Tay Joyce at p 898.

59       In the circumstances, I do not feel justified in disturbing the finding of the district judge on this point. The difficulty then arises as to whether, in the light of that finding, he should have made the two substantive orders he did. If the car had already been sold at the time of the hearing what would have been the purpose of the declaration prayed for? No doubt, the transfer was null and void since it was forged, but the true issue between the buyer and the seller was surely whether the seller was still the owner of the car or otherwise entitled to possession of it as against the buyer, but that was not the relief asked for by the seller.

60       A more fundamental objection is that the learned district judge made an order in respect of a matter which was not before him on the pleadings, namely, the proceeds of sale held by the stakeholders. In this respect, counsel below did not re-frame their case in an appropriate manner so as to give the learned district judge the power to make an order in respect of the proceeds of sale. Counsel could have approached the problem in a number of ways.

(a)       They could have asked the judge to make a declaration relating to the ownership or entitlement to possession of the car as if it had not been sold on the basis that, depending on the judge’s decision on the issue put to him, the parties would then be able to dispose of the proceeds of sale in accordance with a contractually binding settlement agreement between the parties. The declaration, while made in relation to facts which did not exist, would serve the purpose of enabling the dispute to be settled.

(b)      Alternatively, the parties could have amended their pleadings to reflect the change in the subject matter of the action. This would, however, have meant reformulating the issues of law involved, since ownership of the car did not necessarily mean entitlement to the proceeds of sale for the reasons I have earlier described. If this had been done, the question of the seller’s lien may very well have surfaced, enabling the learned district judge to have focused his attention on the correct issue which had to be decided.

61       At the end of the day, what we have is a declaration that is of no legal or practical use to anyone. As at the date of the trial there was no need to make any declaration on the validity of the transfer, as the car had already been sold. Indeed, if one were to give any kind of effect to the declaration, it would imply that the transfer form executed by the buyer in favour of the third party who ultimately purchased the car was invalid (or at least useless) since he had no right (or need) to sign any transfer form, but, fortunately, I do not have to consider that issue in these proceedings. The real issue at stake at the trial was the entitlement to the proceeds of sale, and the declaration was quite immaterial to that issue, or at least was not the most direct or sensible way of determining that issue.

62       The court will not normally grant a declaration on a hypothetical issue or an issue that has no practical consequence (see generally Dr Zamir’s book at pp 43– 69). If a hypothetical issue had to be fought in order for the parties to determine (as between themselves) the entitlement to the proceeds of sale, it would have been sufficient to have argued the buyer’s counterclaim for possession because that would have raised directly the question of title to the car. What is more important is that the court had no power to make any order in relation to the proceeds of sale since they were not the subject matter of any claim arising from the pleadings.

63       Accordingly, although not quite for the reasons advanced by counsel for the buyer, I agree with him that, even if the learned district judge had the power to grant a bare declaration, he should not have granted the particular declaration in the form he did. The correct order he ought to have made at the end of the trial was to have dismissed both the seller’s claim (as claiming a relief not within the powers of the court or one which the court should not have granted in the circumstances of the case) as well as the buyer’s claim (as being unjustified on the merits).

Costs

64       That leaves the issue of costs. I am aware that the real purpose of this appeal is for the buyer to salvage the costs he has had to pay to the seller in the court below. I have considered carefully whether I should also disturb the order for costs made by the learned district judge in view of my conclusions reached in this appeal. On the one hand, we have a situation where two innocent parties have been cheated by a fraudster, and it may be said that the learned district judge should have exercised his discretion not to make any award for costs in those circumstances. However, the learned district judge no doubt awarded costs on the principle that costs should normally follow the event, and fault is not a prerequisite of an order for costs where title is in issue.

65       My order today does not mean that the case should not have been fought at all. Clearly the parties had to resolve the issue of entitlement to the proceeds of sale, and they chose to do so effectively by litigating the issue of entitlement to the car. In this regard, the real claim that was before the court was the buyer’s counterclaim for possession and, on reviewing the notes of evidence, I cannot see that, if the seller had made no claim at all in the proceedings, there would have been any appreciable difference in the length of the trial or the manner in which it was conducted. All the evidence and arguments would still have proceeded, as far as I can tell, in more or less the same way if the buyer’s counterclaim had been the only issue litigated. Since the buyer lost his counterclaim, it was certainly within the discretion of the learned district judge to have awarded costs against him and I am not prepared to disturb that finding.

66       I also do not think it right to award the buyer any costs of this appeal because it has resulted in no substantial benefit to him apart from setting the record straight. My only consolation for the buyer is that I make no order on the costs of this appeal.

67       I therefore order that the declaration and the order relating to the proceeds of sale be set aside but that the dismissal of the counterclaim and the order for costs be affirmed. In setting aside the order for payment of the proceeds of sale I do not mean to imply that the seller is not entitled to retain the proceeds of sale. As between the buyer and the seller (who are the only parties before me) I do not think that the buyer would have any claim to the proceeds. However, I make no decision on the entitlement to or disposal of, the sale proceeds because :

(a)       I can hardly order the sale proceeds to be returned to the stakeholders when they are not a party to this appeal; and

(b)      in any event, I should not make any order for the same reason that I have allowed the appeal, namely, that the proceeds of sale are not the subject matter of the claim or counterclaim.

Appeal allowed.

Reported by Tan Chuan Thye