AmBank (M) Bhd v Yong Kim Yoong Raymond

• Jurisdiction: Singapore
• Judge: Chan Sek Keong CJ
• Judgment Date: 22 January 2009
• Neutral Citation: [2009] SGCA 5
• Docket Number: Civil Appeal No 156 of 2007
• Date: 22 January 2009
• Year: 2009
• Published date: 23 January 2009
• Plaintiff Counsel: Sivakumar Murugaiyan and Parveen Kaur Nagpal (Madhavan Partnership)
• Citation: [2009] SGCA 5
• Defendant Counsel: Roderick Edward Martin and Trinel C (Martin & Partners)
• Court: Court of Appeal (Singapore)
• Subject Matter: Whether wide or narrow meaning of "enforceable by execution in Singapore" in s 61(1)(d) Bankruptcy Act (Cap 20, 2000 Rev Ed) should be adopted,Meaning of "enforceable by execution in Singapore" in s 61(1)(d),Legislative purpose of s 61(1)(d) Bankruptcy Act (Cap 20, 2000 Rev Ed),Bankruptcy,Insolvency Law,Leave to issue writ of execution,Construction of statute,Construction of statutory provisions in bankruptcy legislation – Construction of s 61(1)(d) Bankruptcy Act (Cap 20, 2000 Rev Ed),Malaysian judgment registered under Reciprocal Enforcement of Commonwealth Judgments Act (Cap 264, 1985 Rev Ed),Whether s 61(1)(d) required judgment creditor of registered foreign judgment of more than six years to obtain leave pursuant to O 46 r 2(1)(a) Rules of Court (Cap 322, R 5, 2006 Rev Ed) before commencing bankruptcy proceedings,"Enforceable by execution in Singapore",Whether wide or narrow meaning of "enforceable by execution in Singapore" in s 61(1)(d) should be adopted,Order 46 r 2(1)(a) Rules of Court (Cap 322, R 5, 2006 Rev Ed),Statutory Interpretation,Civil Procedure,Foreign judgments,Applicability of s 61(1)(d),Section 61(1)(d) Bankruptcy Act (Cap 20, 2000 Rev Ed),Legislative purpose of s 61(1)(d),Enforcement,Whether s 61(1)(d) applicable to bankruptcy application based on debt incurred in Malaysia where Malaysian judgment for debt had been registered in Singapore,Legislative history of Bankruptcy Act (Cap 20, 2000 Rev Ed),Words and Phrases,Whether s 61(1)(d) Bankruptcy Act (Cap 20, 2000 Rev Ed) required judgment creditor of registered foreign judgment of more than six years to obtain leave pursuant to O 46 r 2(1)(a) Rules of Court (Cap 322, R 5, 2006 Rev Ed) before commencing bankruptcy proceedings,Judgments and orders

22 January 2009 Judgment reserved.

V K Rajah JA (delivering the judgment of the court):

Introduction

1 The present appeal concerns the proper construction to be accorded to s 61(1)(d) of the Bankruptcy Act (Cap 20, 2000 Rev Ed) (“BA 2000”). Section 61(1) of BA 2000 reads as follows:

Grounds of bankruptcy application

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 —

(a) the amount of the debt, or the aggregate amount of the debts, is not less than $10,000;

(b) the debt or each of the debts is for a liquidated sum payable to the applicant creditor immediately;

(c) the debtor is unable to pay the debt or each of the debts; and

(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]

2 More precisely, the real controversy for us to resolve is the meaning of the words that are italicised in bold above, ie, “enforceable by execution in Singapore”.

The facts

3 The facts are straightforward. The appellant is AmBank (M) Berhad (“AmBank”), a Malaysian bank that was formerly known as Malaysia Borneo Finance Corporation (M) Berhad (“MBFC”), while the respondent is Mr Raymond Yong Kim Yoong (“YKY”), a Singaporean.

4 On 3 November 1988, MBFC obtained judgment against YKY in Malaysia in Civil Suit No C23-1629-86 (“the Malaysian Judgment”) for YKY’s failure to honour his obligations under a personal guarantee which he had furnished to MBFC in relation to loans granted by MBFC to two Malaysian companies, namely Tanjong Petrie Enterprises Sdn Bhd and Sun Hun Perumahan Sdn Bhd. After the Malaysian Judgment was obtained against YKY, MBFC changed its name to MBF Finance Berhad. Subsequently, the name was changed again to the present name, AmBank (M) Berhad.

5 On 12 October 1994, after a period of almost six years, the Malaysian Judgment was registered in Singapore (“the Registered Judgment”) under the provisions of the Reciprocal Enforcement of Commonwealth Judgments Act (Cap 264, 1985 Rev Ed) (“RECJA”). This was followed by a further period of utter inactivity of almost 12 years.

6 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. In response to AmBank’s application, YKY filed his notice of objection and supporting affidavit on 13 November 2006. The grounds relied on by YKY to oppose AmBank’s bankruptcy application were as follows:[note: 1]

(a) The Malaysian Judgment was time barred under s 6(3) of the Limitation Act (Cap 163, 1996 Rev Ed), which provides that no action upon a judgment shall be brought after the expiration of 12 years from the date on which the judgment became enforceable.

(b) The Registered Judgment was not a debt “enforceable by execution in Singapore” under s 61(1)(d) of BA 2000 because AmBank had not obtained the leave of court under O 46 r 2(1)(a) of the Rules of Court (Cap 322, R 5, 2006 Rev Ed), which provides that a writ of execution to enforce a judgment may not be issued without the leave of the court if more than six years have passed since the date of the judgment:

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;

(c) AmBank had failed to comply with O 46 r 2(1)(b) of the Rules of Court by failing to obtain the leave of the court to enforce the Registered Judgment because the Registered Judgment (as well as the Malaysian Judgment) had been obtained in MBFC’s name and not AmBank’s name. Order 46 r 2(1)(b) 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:

…

(b) where any change has taken place, whether by death or otherwise, in the parties entitled or liable to execution under the judgment or order;

7 The bankruptcy application was heard by an assistant registrar (“the AR”) on 4 January 2007 and 2 February 2007, and the dispute before her centred largely on the time-bar issue. The AR eventually dismissed YKY’s objections and allowed AmBank’s application. She was of the view that the limitation period started to run only from the date of the Registered Judgment and not the date of the Malaysian Judgment, and thus the bankruptcy application was not time barred. She further noted that bankruptcy proceedings were governed by a separate statutory regime that did not include O 46 r 2(1) of the Rules of Court and hence the leave of the court was not required before a bankruptcy application could be filed even though more than six years had passed from the date of the Registered Judgment. YKY appealed against the AR’s decision. On appeal to a High Court judge, YKY jettisoned ground (a) (see [6] above) and relied only on grounds (b) and (c).

The decision below

8 Tan Lee Meng J heard the appeal against the AR’s decision, and he agreed with YKY that the words “enforceable by execution in Singapore” meant that a petitioning creditor must have in hand a judgment that was immediately enforceable by execution (see AmBank (M) Berhad v Raymond Yong Kim Yoong [2008] 1 SLR 441 (“the Judgment”) at [24]–[25] where Tan J observed with his customary clarity):

In view of the arguments advanced by Mr Martin [counsel for YKY] and the legislative history of the present Act, there is no basis for the words “which is enforceable by execution in Singapore”, which follow the word “judgment” in s 61(1)(d) of the present Act to be ignored as surplusage. ....

In my view, for debts incurred outside Singapore, the petitioning creditor must have in his hands a judgment that is enforceable by execution and if leave is required before it can be executed, it must be obtained before a bankruptcy application founded on a failure to pay the judgment debt in question can be presented.

[emphasis added]

9 As more than six years had lapsed since the Registered Judgment was obtained, Tan J noted (at [11]–[12]) that the leave of the court under O 46 r 2(1)(a) of the Rules of Court was required before AmBank could execute the Registered Judgment, and that such leave had not been obtained by AmBank:

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 …

It was common ground that leave to enforce the registered judgment had not been obtained.

10 Tan J thus concluded that AmBank was not entitled to present a bankruptcy application, given that it had failed to obtain the requisite leave pursuant to O 46 r 2(1)(a) and had therefore not satisfied the requirement in s 61(1)(d) of BA 2000. The appeal was accordingly allowed. Tan J was also of the view that, in the light of his conclusion on O 46 r 2(1)(a), it was unnecessary to consider ground (c) (see [6] above) relied on by YKY (at [26] of the Judgment):

As I have found that AmBank was not entitled to apply for YKY to be made a bankrupt as it did not obtain the leave of the court under O 46 r 2(1)(a) of the Rules of Court, it is not necessary for me to consider the effect of O 46 r 2(1)(b) and the change of the original creditor’s name on AmBank’s right to apply for YKY to be made a bankrupt.

11 AmBank has, in turn, appealed against Tan J’s decision.

The parties’ arguments

12 In the present appeal, AmBank’s case against Tan J’s decision is essentially two-pronged.

13 Firstly, AmBank contends that s 61(1)(d) of BA 2000 is irrelevant and inapplicable to its application. This, it says, is because s 61(1)(d) applies only when the debt relied upon to present the bankruptcy application is “incurred outside Singapore”. Since s 3(3)(a) of RECJA provides that a foreign judgment that is registered is “of the same force and effect” as a judgment “originally obtained” in the Singapore courts, AmBank contends that the Malaysian Judgment, upon registration, is effectively converted to a Singapore judgment. Accordingly, “the Registered Judgment by virtue of registration under section 3(3) of the RECJA became for all intents and purposes a ‘Singapore debt’”[note: 2] and thus s 61(1)(d) does not apply.

14 Secondly, AmBank submits that even if s 61(1)(d) applied, Tan J had misinterpreted the words “enforceable by execution in Singapore”. AmBank submits that these words only required the Registered Judgment to be “capable of enforcement” [emphasis in original] and “does not ... require that all procedural steps for execution under Order 46 rule 2(1)(a) [of the Rules of Court] first be complied with”.[note: 3] Further, AmBank contends that the present O 1 r 2(2) of the Rules of Court made it clear that the Rules of Court shall not apply to bankruptcy proceedings (save for O 63A and items 71D to 71I and 75 of Appendix B to the Rules of Court) and thus O 46 r 2(1)(a) or r 2(1)(b) simply had no application in the present case.[note: 4]

15 YKY, on the other hand, relied on the same grounds of objections canvassed below before Tan J, ie, grounds (b) and (c) (see [6] above). As such, the time-bar issue canvassed before the AR below is also not before us.

The issues on appeal

16 Flowing from the arguments raised by AmBank and the grounds of objections relied on by YKY, there are only three issues for our consideration:

(a) Does s 61(1)(d) of BA 2000 have any application to the present bankruptcy application filed by AmBank?

(b) If applicable, what is the proper construction to be accorded to s 61(1)(d), especially the words “enforceable by execution in Singapore”?

(c) Is AmBank prevented...