AmBank (M) Berhad v Raymond Yong Kim Yoong

• Jurisdiction: Singapore
• Judge: Tan Lee Meng J
• Judgment Date: 21 November 2007
• Neutral Citation: [2007] SGHC 172
• Date: 21 November 2007
• Subject Matter: Civil Procedure,Insolvency Law,Enforcement,Bankruptcy application under s 61(1)(d) Bankruptcy Act (Cap 20, 2000 Rev Ed),Whether leave of court required under O 46 r 2(1) Rules of Court (Cap 322, R 5, 2006 Rev Ed),Foreign judgments,Whether debt payable by virtue of judgment or award enforceable by execution in Singapore,Bankruptcy
• Docket Number: In Bankruptcy No B2703 of 2006 (Registrar's Appeal No 38 of 2007)
• Published date: 13 March 2008
• Defendant Counsel: Sivakumar Murugaiyan and Parveen Kaur Nagpal (Madhavan Partnership)
• Court: High Court (Singapore)
• Plaintiff Counsel: Roderick E Martin and Trinel Chakraborty (Martin & Partners)

21 November 2007 Judgment reserved.

Tan Lee Meng J:

1 The appellant, Mr Raymond Yong Kim Yoong (“YKY”), appealed against the decision of the Assistant Registrar, Ms Denise Wong (“AR Wong”), who allowed the application of the respondent, AmBank (M) Berhad (“AmBank”), a Malaysian bank, for a bankruptcy order against him almost 18 years after judgment had been entered against him in Malaysia (the “Malaysian judgment”) in 1988 and almost 12 years after the Malaysian judgment had been registered in Singapore in 1994.

Background

2 On 3 November 1988, Malaysia Borneo Finance Corporation (M) Berhad (“MBFC”) obtained judgment against YKY in Malaysia for failing to honour his obligations under a personal guarantee, which had been furnished to MBFC in relation to loans granted by it to two Malaysian companies. After the Malaysian judgment was obtained against YKY, MBFC changed its name to MBF Finance Berhad. Subsequently, the bank’s name was changed once again to AmBank (M) Berhad.

3 The Malaysian judgment was registered in Singapore almost six years later on 12 October 1994 under the provisions of the Reciprocal Enforcement of Commonwealth Judgments Act (Cap 264, 1985 Rev Ed). Section 3(3)(a) of this Act provides that where a judgment is registered under the section, it “shall, as from the date of registration, be of the same force and effect, and proceedings may be taken thereon, as if it had been a judgment originally obtained or entered upon the date of registration in the registering court”.

4 For almost 12 years after the registration of the Malaysian judgment in Singapore, AmBank took no steps to enforce the registered judgment. It was not until 18 September 2006 that AmBank finally served a statutory demand on YKY. As the amount claimed was not paid by YKY, AmBank instituted bankruptcy proceedings against him on 10 October 2006.

5 YKY responded to AmBank’s application by filing his Notice of Objection and supporting affidavit on 13 November 2006.

6 After hearing counsel for the parties on 4 January 2007 and 2 February 2007, AR Wong dismissed YKY’s objections and allowed AmBank’s application.

7 YKY appealed against AR Wong’s decision.

8 At the hearing of the appeal, YKY relied on the following two grounds for objecting to the bankruptcy application:

(i) The judgment against YKY is not a debt enforceable by execution in Singapore under s 61(1)(d) of the Bankruptcy Act (Cap 20, 2000 Rev Ed) (“the Act” or “the present Act”) because the judgment creditor had not obtained the leave of the Court under O 46 r 2(1) (a) of the Rules of Court (Cap 322, R5, 2006 Rev Ed); and

(ii) The judgment creditor had failed to comply with O 46 r 2 (1)(b) of the Rules of Court by obtaining the leave of the Court to enforce the judgment because it had been obtained in MBFC’s name and not AmBank’s name.

Whether leave of the Court is required under O 46 r 2(1)

9 In regard to YKY’s assertion that Ambank is required to obtain leave of the Court under O 46 r 2(1) of the Rules of Court, reference should first be made to s 61 of the Act, which regulates the circumstances under which a bankruptcy application may be presented. Section 61 draws a distinction between debts incurred in Singapore and debts incurred elsewhere. In respect of debts incurred outside Singapore, s 61 provides as follows:

61 – (1) No bankruptcy application shall be presented to the court in respect of any debt or debts unless at the time the application is made –

….

(d) where the debt or each of the debts is incurred outside Singapore, such debt is payable by the debtor to the applicant creditor by virtue of a judgment or award which is enforceable by execution in Singapore.

[emphasis added]

10 In Medical Equipment Credit Pte Ltd v Sim Kiok Lan Alice [1999] 1 SLR 70, L P Thean JA, who delivered the judgment of the Court of Appeal, stressed at p 78 that the “underlying foundation” of a petition in bankruptcy is the inability of the debtor to pay a debt which satisfies the requirements of s 61 of the Act. It follows that AmBank must, as is required by s 61(1)(d) of the Act, satisfy the Court that the debt in respect of which the bankruptcy application was presented was one that was payable to it by YKY “by virtue of a judgment or award which is enforceable by execution in Singapore”.

11 By the time AmBank sought to have YKY declared a bankrupt in September 2006, the registered judgment was no longer enforceable by execution in Singapore without leave of the Court because almost 12 years had passed by since the Malaysian judgment was registered. This is due to O 46 r 2(1)(a) of the Rules of Court, which provides as follows:

2 – (1) A writ of execution to enforce a judgment or order may not issue without the leave of the Court in the following cases:

(a) where 6 years or more have lapsed since the date of the judgment or order

12 It was common ground that leave to enforce the registered judgment had not been obtained. YKY contended that as more than 6 years had lapsed since the registration of the Malaysian judgment in Singapore, it was necessary for AmBank to obtain the leave of the Court under O 46 r 2(1) of the Rules of Court before proceeding to apply to have him made a bankrupt. If such leave is required, AmBank will face insurmountable problems as s 6(3) of the Limitation Act (Cap 163, 1996...