Oversea-Chinese Banking Corp Ltd v Ravichandran s/o Suppiah

• Court: High Court (Singapore)
• Judge: Aedit Abdullah JC
• Judgment Date: 02 January 2015
• Neutral Citation: [2015] SGHC 1
• Citation: [2015] SGHC 1
• Published date: 09 January 2015
• Docket Number: Bankruptcy No 2808 of 2013 (Registrar’s Appeal No 355 of 2014)
• Hearing Date: 02 December 2014
• Plaintiff Counsel: Koh Jean (Yeo-Leong & Peh LLC)
• Defendant Counsel: Krishna Morthy (S K Kumar Law Practice LLP)
• Subject Matter: Insolvency Law,Bankruptcy,Bankruptcy application disputed by debtor

Aedit Abdullah JC: Introduction

In this case, the Defendant contended that he should not be held to a guarantee given by him to the bank, because of a bare allegation that he had not signed the appropriate document. He made this contention though he had on multiple occasions negotiated with the bank, had been sent for assessment for a debtor programme and only raised the issue of not signing very late in the day. He also provided no explanation of the use of his particulars or personal documents in the application to the bank.

Seven years ago, the Defendant, Mr Ravichandran stood as a guarantor for the hire-purchase of a vehicle by one Mr Gunasekaran. Mr Gunasekaran was unable to keep up payment, and the bank, the Plaintiffs, called on the Defendant’s guarantee. The Defendant negotiated with the Plaintiffs on a number of occasions. Bankruptcy proceedings were eventually started by the Plaintiffs against the Defendant. After a number of hearings, and after instructing his solicitors, the Defendant then said that the signature on the guarantee was not his. On the Defendant’s application, the Assistant Registrar set aside the statutory demand.

On appeal by the Plaintiffs from the Assistant Registrar, I allowed the appeal. I found that the Defendant had not raised a triable issue as he had only made a bare allegation, which was not supported by any other evidence before me and which was contradicted by other evidence instead. Dissatisfied with my decision, the Defendant has appealed.

Background

On 1 December 2007, the Defendant was supposed to have signed a guarantee of a hire purchase agreement over a vehicle SJA4808L, purchased by one Karuppiah Gunasekaran. A copy of the application form, identity card of the Defendant and his payslips for June, July and August 2007 were submitted to the Plaintiffs.

Following Mr Gunasekaran’s default, a notice under the Hire Purchase Act (Cap 125, 1999 Rev Ed) (“the Act”) was issued to Mr Gunasekaran on 20 March 2013, and a copy was sent to the Defendant’s address in Choa Chu Kang. Subsequently, following the failure of Mr Gunasekaran to make payment of the arrears, the vehicle was repossessed by the Plaintiffs in April 2013. Another statutory notice, dated 2 May 2013, under the Hire Purchase Act was sent to Mr Gunasekaran and copied to the Defendant. This notice, referred to as the Fifth Schedule Notice, informed the Defendant that he should seek advice. That portion of the notice read:

Cc Ravichandran s/o Suppiah

[Chua Chu Kang Address]

This notice is sent to you as a guarantor of KARRUPIAH GUNASEKARAN.

As guarantor you have certain rights under the Hire Purchase Act, Chapter 125 and you are advised to seek advice at once.

The vehicle was sold in June 2013. A shortfall of $11,301.94 remained after the sale. On 18 June 2013, letters of demand for that shortfall were sent to both Mr Gunasekaran and the Defendant. This letter was received personally at the Choa Chu Kang address. The Defendant gave his hand phone number to the Plaintiffs at this time.

On 17 September 2013, a statutory demand was served on the Defendant at the Choa Chu Kang address, in respect of the debt. Thereafter, the Plaintiffs were unable to contact the Defendant. A further letter was sent on 27 November 2013, warning the Defendant that bankruptcy proceedings were imminent. On 27 December 2013, the Plaintiffs filed the bankruptcy application from which these proceedings stemmed. This was served personally on the Defendant on 2 January 2014.

Hearings were held on 6 occasions between January and August 2014. Some of the hearings were adjourned for proposals, and on at least one occasion, the Defendant was to be assessed for suitability for the Debt Repayment Scheme administered by the Insolvency and Public Trustee’s Office. On 28 August 2014, the Defendant’s solicitors finally informed the court that they would be applying to set aside the statutory demand. This was heard on 10 October 2014. On 24 October 2014, after hearing further arguments from the parties, the Assistant Registrar set aside the statutory demand.

The Plaintiffs’ Case

On appeal before me, an application was firstly made by the Plaintiffs to adduce new evidence, not available at the hearing before the Assistant Registrar. The Plaintiffs also contended that the application by the Defendant to set aside the statutory demand was irregular as it had been made one year out of time.

As to the substantive issues, the Plaintiffs argued that the Assistant Registrar had erred in finding that a triable issue had been raised by the Defendant. The test is the same as that for the granting of summary judgment under O 14 of the Rules of Court (Cap 322, R 5, 2014 Rev Ed). Citing a decision of the Court of Appeal examining paragraph 144 of the Supreme Court Practice Directions, it was further contended that a higher threshold than a genuine triable case was in fact required, and the burden lay on the Defendant. Here, the Plaintiffs had in fact proven a prima facie case. The Defendant’s behaviour showed that he had signed the guarantee, and he had not behaved in the manner that a reasonable layman would have. Furthermore, where the evidence of the Defendant is incredible in any material respect, there cannot be said to be any reasonable probability of a triable issue. And even if fraud is alleged, but there is no prospect of the defence succeeding at trial, summary judgment is to be given, as is the case here. The Plaintiffs argued that in the present case, the Defendant had merely denied the signature, without raising sufficient evidence to invoke a triable issue. His actions were consistent with someone who thought he was bound by the guarantee. Allowing the Defendant’s setting aside would open the floodgates.

The Defendant’s Case

In oral argument, Counsel for the Defendant maintained that the statutory demand should be set aside. The Defendant denied the signature was his when he was shown the guarantee in August 2014. The requirements of the Hire Purchase Act had to be complied with, and the Plaintiffs should have obtained the testimony of the witness to the signature. The hirer should also be brought in to testify, and the matter tested at trial. On the facts, there was a difference between the Defendant’s actual signature and that on the guarantee. His behaviour as relied on by the Plaintiffs was the product of his inexperience. He did not know the consequences. It was maintained that the Defendant did ask for a copy of the guarantee.

The Procedural Matters

I declined to allow the Plaintiffs to adduce new evidence, and did not rule against the Defendant on the lateness of his application to set aside the statutory demand.

The application to adduce new evidence

The subject of this application was an affidavit made by an officer of the Plaintiffs to convey the evidence of the witness to the...