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3. Interpleader Proceedings

CIVIL PROCEDURE 2 (Universiti Malaya)

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INTERPLEADER PROCEEDINGS
(ORDER 17)

What are interpleader proceedings?

 Definition: Where Df is sued by Pf claiming property held by Df in which Df has no interest
but which is also claimed by a TP, Df may take out + serve a summons on both claimants for
an order that the issue as to ownership be decided between them.
o E.g. Proceedings commenced by a person who is in possession of property to which
he himself have no claim, but the property is being claimed by 2/more persons + he
is unsure as to who is the proper claimant.
o The person holding the property applies to Court + asks Court to decide who is the
proper claimant.
o The person who applies to Court is the interpleader + the proceeding is called
‘interpleader proceeding’.

Applicable Law and Procedural Rule

 Interpleader proceedings are governed by O.17.
 They are also mentioned under Para 5 of the CJA (Additional powers of HC):
o Interpleader
5. Power to grant relief by way of interpleader—
(a) where the person seeking relief is under liability for any debt, money, or goods or
chattels, for or in respect of which he has been, or expects to be, sued by two or
more parties making adverse claims thereon; and
(b) where a Sheriff, bailiff or other officer of court is charged with the execution of
process of court, and claim is made to any money or goods or chattels taken or
intended to be taken in execution under any process, or to the proceeds or value of
any such goods or chattels by any person other than the person against whom the
process is issued, and to order the sale of any property subject to interpleader
proceedings.

Types of Interpleader Proceedings

 2 types:
o O.17, r.1(1)(a): Stakeholder’s interpleader
o O.17, r.1(1)(b): Sheriff’s interpleader (not covered in this course)

(a) Stakeholder’s Interpleader.

Where D is sued by P claiming property held by D in which D has no interest but which is also
claimed by a third party, D may take out and serve a summons on both claimants for an
order that the issue as to ownership be decided between them.

Hong Leong Bank Bhd v Manducekap Hi-Tec Sdn Bhd & Ors [2009] 7 MLJ 124;
Tan Kau Tiah v Tetuan Teh Kim Teh, Salina & Co & Anor [2010] 3 MLJ 569 CA; and
Lee Heng Moy (f) v John Hancock Life Insurance (M) Bhd & Anor [2010] 1 MLJ 624, CA

(b) Sheriff’s Interpleader.

Hup Cheong Motor Co v Saong Jonathan & Anor [1992] 2 MLJ 33; and
Overseas Investments Pte Ltd v Anthony William O’Brien & Anor [1988] 3 MLJ 332.

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Procedure
 Procedure depends on whether it is a fresh action/pending action.
(a) Fresh action
(b) Pending action
(c) Requirements of affidavit
(d) Service

(a) Fresh action

 Fresh action is taken by an interpleader to determine owner of property.
 Commenced by way of OS in Form 7.
 Supported by an affidavit.

(b) Pending action

 Pending action is where a Pf has already commenced action against Df(s).
 Commenced by filing a notice of application in Form 27/28.
 O.17, r.3: Notice of application must be supported by an affidavit.

(c) Requirements of affidavit

 O.17, r.3(2): 3 requirements
o Interpleader must state that he claims no interest in subject matter of dispute.
o Interpleader must state that he does not collude with any other claimants to subject
matter.
o Interpleader must state that he is willing to pay/transfer subject matter to
Court/dispose of it as Court may direct.

(d) Service
 OS/notice of application + affidavit must be served on parties claiming interest.
 Time limit: O.17, r.4(1) states that the OS/notice of application + affidavit must be served
within 7 days before the return day.
o Return day: Date of hearing Court fixed. It will be stated on the OS/notice of
application once issued by Court.
 Mode:
o O.17, r.4(2): If action was commenced by OS, OS + affidavit must be served
personally.
o O.17, r.4(3): If action was commenced by notice of application, notice of application
need not be served personally unless ordered by Court.
o If Court doesn’t tell you how to serve, then ordinary service under O.62, r.6 applies.

Hearing of the Originating Summons or Notice of Application

 Governed by O.17, r.5.
 On the hearing date fixed, all parties are supposed to attend.
 O.17, r.5(3): At the hearing, if any of the Claimants do not appear, he is deemed to have
waived his claim + he is barred from prosecuting his claim.
 If all parties concerned appear at the hearing, it must be decided whether the matter can be
hear summarily OR go to trial.
 Court can proceed to hear summarily if both parties consent OR the matter only concerns
matters of law + no dispute as to fact.
 If there are substantial dispute as to fact + especially if there is a need to call
witnesses/expert witnesses, then the matter must go to trial.
 If Court orders trial, the Court must make certain directions to ensure smooth trial.
 Court may direct one claimant to be the Pf + order the other claimant to be the Df.

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 The interpleader may then step out of the pleadings.

 Court will then determine the issues to be tried.
 The Court will make directions as to how the interpleader is to transfer the property e.g. into
Court/some other place.

Trial
 O.17, r.5(3): If any of the claimants does not appear at the trial, he is barred from
prosecuting his claim.
 If any of the parties does not comply with any of the directions which were made at the first
hearing, he will be barred from prosecuting his claim.
 O.17, r.5: If all parties appear, then the usual conduct will take place—Court will decide who
is the proper claimant based on evidence adduced.

Costs
 In interpleader proceedings, who bears costs?
 The cost of the interpleader proceedings will be paid by the losing party.
 The losing party will pay costs of interpleader + winning party.

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