Marina Bay Sands Pte Ltd v Osuki Yohei

CourtHigh Court (Singapore)
JudgeJonathan Ng Pang Ern AR
Judgment Date03 May 2019
Neutral Citation[2019] SGHCR 7
Citation[2019] SGHCR 7
Docket NumberBankruptcy No 359 of 2019
Hearing Date11 April 2019,14 March 2019
Published date10 May 2019
Plaintiff CounselChoy Wai Kit, Victor (Drew & Napier LLC)
Defendant CounselThe defendant absent and unrepresented.
Subject MatterInsolvency Law,Bankruptcy,Statutory demand
Jonathan Ng Pang Ern AR:

Bankruptcy No 359 of 2019 (“B 359”) is an application by the plaintiff, Marina Bay Sands Pte Ltd, for a bankruptcy order to be made against the defendant, Osuki Yohei. B 359 is founded on a statutory demand dated 17 December 2018 (the “SD”).1 Not unusually, the plaintiff’s solicitors purported to serve the SD by mailing, pursuant to the parties’ agreement, a copy of the SD to the defendant’s last known business address. Unusually, however, the SD was returned unclaimed. Was the SD validly served in such circumstances? Counsel for the plaintiff, Mr Victor Choy, submitted that it was. After hearing Mr Choy on two occasions, I reserved judgment. This is my decision.

Background facts

On 5 October 2018, the plaintiff obtained judgment in default of appearance against the defendant in High Court Suit No 923 of 2018. The judgment was for the sum of $2,000,000, together with contractual interest and costs.2

Pursuant to this judgment, the plaintiff issued the SD for the sum of $2,030,598.65.3 The SD was dated 17 December 2018.4 Two days later, on 19 December 2018, the plaintiff’s solicitors mailed a copy of the SD in a prepaid envelope by way of certificate of posting via Singapore Post Limited to the defendant’s last known business address.5 This was pursuant to cl 10 of a Credit Agreement between the plaintiff and the defendant (“cl 10”), which provided as follows: … [The plaintiff] may effect service of any legal process on the [defendant] by sending it by ordinary post from Singapore to, (i) [the defendant’s] last known address (being a post office box, or a place of residence or business, or otherwise) and/or, (ii) the address provided by the [defendant] above. Such process or documents shall be deemed validly served on the [defendant].6

As it turned out, however, the SD was returned unclaimed to the plaintiff’s solicitors with the remark “[n]o such name/company”.7

Relying on the SD and the presumption under s 62(a) of the Bankruptcy Act (Cap 20, 2009 Rev Ed) (the “BA”) (see [9] below),8 the plaintiff commenced B 359 against the defendant on 13 February 2019. The application was mailed to the defendant in a similar manner as the SD.9

B 359 first came up for hearing before me on 14 March 2019. The defendant was absent. However, I was prepared to give him a chance as this was the first hearing, and therefore adjourned B 359 for four weeks. At this hearing, I also highlighted to Mr Choy my concern that the SD was returned unclaimed. To this, Mr Choy submitted that service was nonetheless successful and briefly brought me through two High Court decisions: Re Rasmachayana Sulistyo (alias Chang Whe Ming), ex parte The Hongkong and Shanghai Banking Corp Ltd and other appeals [2005] 1 SLR(R) 483 (“Rasmachayana”) and Oversea-Chinese Banking Corp Ltd v Measurex Corp Bhd [2002] 2 SLR(R) 684 (“OCBC”). At the end of the hearing, I invited Mr Choy to put in written submissions for the next hearing, if he thought this necessary.

The defendant was again absent at the next hearing on 11 April 2019. Mr Choy did not take up my invitation to put in written submissions, but maintained his earlier position in oral submissions. He emphasised that the operative word in cl 10 (see [3] above) was “sending”. As I understand it, the crux of Mr Choy’s submissions was that the act of sending the SD alone was sufficient for there to be valid service; whether the SD was delivered was a separate (and irrelevant) issue.

The law on service of statutory demands

The BA and the Bankruptcy Rules (Cap 20, R 1, 2006 Rev Ed) (the “BR”) prescribe a comprehensive list of requirements in respect of a creditor’s bankruptcy application. For present purposes, it suffices to refer only to some of the key provisions relating to service of statutory demands.

Section 61(1)(c) of the BA provides that one of the cumulative grounds of a bankruptcy application is that “the debtor is unable to pay the debt or each of the debts”. Section 62(a) of the BA then creates a rebuttable presumption in favour of s 61(1)(c) of the BA when, in a creditor’s bankruptcy application: (a) the debt is immediately payable; (b) the creditor has served on the debtor in the prescribed manner, a statutory demand; (c) at least 21 days have elapsed since the statutory demand was served; and (d) the debtor has neither complied with it nor applied to set it aside:

Presumption of inability to pay debts

For the purposes of a creditor’s bankruptcy application, a debtor shall, until he proves to the contrary, be presumed to be unable to pay any debt within the meaning of section 61(1)(c) if the debt is immediately payable and — the applicant creditor to whom the debt is owed has served on him in the prescribed manner, a statutory demand; at least 21 days have elapsed since the statutory demand was served; and the debtor has neither complied with it nor applied to the court to set it aside;

The “prescribed manner” of service referred to in 62(a)(i) of the BA is in turn set out in r 96 of the BR. Rule 96(2) of the BR contemplates personal service as the default modality of service. However, r 96(3) of the BR allows for substituted service when a creditor is not able to effect personal service:

Requirements as to service

The creditor shall take all reasonable steps to bring the statutory demand to the debtor’s attention. The creditor shall make reasonable attempts to effect personal service of the statutory demand. Where the creditor is not able to effect personal service, the demand may be served by such other means as would be most effective in bringing the demand to the notice of the debtor. Substituted service under paragraph (3) may be effected in the following manner: by posting the statutory demand at the door or some other conspicuous part of the last known place of residence or business of the debtor or both; by forwarding the statutory demand to the debtor by prepaid registered post to the last known place of residence, business or employment of the debtor; where the creditor is unable to effect substituted service in accordance with sub-paragraph (a) or (b) by reason that he has no knowledge of the last known place of residence, business or employment of the debtor, by advertisement of the statutory demand in one or more local newspapers, in which case the time limited for compliance with the demand shall run from the date of the publication of the advertisement; or such other mode which the court would have ordered in an application for substituted service of an originating summons in the circumstances.

A creditor shall not resort to substituted service of a statutory demand on a debtor unless — the creditor has taken all such steps which would suffice to justify the court making an order for substituted service of a bankruptcy application; and the mode of substituted service would have been such that the court would have ordered in the circumstances.

Notwithstanding the modalities of service set out in r 96 of the BR, it is settled law that parties can contractually agree on alternative modalities of service (Rasmachayana at [10]–[31]). Accordingly, statutory demands may be served by: (a) personal service; (b) substituted service; and (c) contractually-agreed modalities of service.

Analytical framework

There is no question that the plaintiff was entitled to effect service in the way that it did (see [3] and [11] above). There would therefore have been valid service of the SD at, or at least shortly after, the time the SD was mailed. The difficulty in the present case arises because the SD was subsequently returned unclaimed (see [4] above). The central question that has to be answered is whether the SD was validly served in such circumstances. This depends on the answer to two subsidiary issues: first, whether, as a general principle, a statutory demand can be validly served when it is returned unclaimed (the “General Issue”); and second, whether the parties’ agreement in this specific case covers a situation where the statutory demand is returned unclaimed (the “Specific Issue”).

If the General Issue is answered in the negative, that will be the end of the matter. The conclusion that must follow is that the SD was not validly served. However, if the General Issue is answered in the...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT