Re Ishak Bin Ismail (Ex Parte United Overseas Bank Limited)

[1] On 14 March 2003, the Petitioner (United Overseas Bank Limited) presented a bankruptcy petition against the Debtor (Ishak Bin Ismail) on the grounds set out in section 61(1) of the Bankruptcy Act (Cap 20, 2000 Rev Ed) read with section 62(a) of the same Act. Essentially, it was alleged that:

[2] When the petition came up for hearing on 25 April 2003, I dismissed the petition on the ground that the service of the statutory demand was irregular. The petition was dismissed without prejudice to the filing of a fresh petition relying on a different statutory demand. The Petitioner has appealed against my decision.

[3] The issue in this case was whether the Petitioner had satisfied the requirements of section 62(a)(i) of the Bankruptcy Act by serving a statutory demand on the Debtor “in the prescribed manner”. The requirements as to the service of a statutory demand are set out in rule 96 of the Bankruptcy Rules (Cap 20, R 1, 2002 Rev Ed). So far as it is relevant to this case, rule 96 states:

[4] The evidence on the service of the statutory demand took the form of an affidavit filed on 14 March 2003 by one Marcus Lin Han Chiang (“Marcus Lin”), a court clerk employed by the firm of Messrs Tan Kok Quan Partnership, the solicitors for the Petitioner. The material portions of his affidavit were as follows:

[5] The Petitioner, having made two unsuccessful attempts to effect personal service of the statutory demand on the Debtor at the Debtor’s last known address in accordance with paragraph 10 of The Supreme Court Practice Directions (1997 Ed), was entitled to effect service of the statutory demand by substituted service. However, the Petitioner chose to effect substituted service of the statutory demand by posting it on the front door or gate of Block 241 Jurong East Street 24 #05-687, Singapore 600241 (the “Premises”) on 10 February 2003, even though:

[6] The property tax search exhibited in Marcus Lin’s affidavit was dated 29 August 2002 and showed the sole owner of the premises to be one Rahimah Bte Abdul Kadir. The exhibited photocopies of the Debtor’s renovation loan and OUB Creditlink application forms showing his residential address to be the address of the Premises were processed in February 2001 and May 2001 respectively. Although Marcus Lin’s affidavit exhibited a photocopy of the Debtor’s identity card showing the Debtor’s address to be the address of the Premises, there was no evidence provided as to when this photocopy of the Debtor’s identity card was made. The address slip on the identity card was dated 31 December 1996. Collectively, the photocopy of the Debtor’s identity card and the photocopies of the Debtor’s application forms merely showed that the Debtor had resided at the Premises from December 1996 to May 2001. The Debtor could have moved from the Premises after May 2001. There was no evidence to suggest that the Debtor continued to reside at, or could be contacted at, the Premises as at 8 February 2003. There was certainly no evidence to contradict the statements made by the male Indian to Marcus Lin on 8 February 2003 that the Debtor was not staying at the Premises.

[7] Rule 96(3) of the Bankruptcy Rules allows a creditor who is unable to effect personal service of the statutory demand to serve the statutory demand by “such other means as would be most effective in bringing the demand to the notice of the debtor”. Rule 96(4) of the Bankruptcy Rules then goes on to describe the different alternative modes of substituted service available under rule 96(3). Rule 96(6) of the Bankruptcy Rules goes on to prohibit a creditor from resorting to a particular mode of substituted service referred to in rule 96(4) unless “the mode of substituted service would have been such that the court would have ordered in the circumstances”. Read together, these rules require a creditor who wishes to serve a statutory demand on a debtor by substituted service to use only such a mode of service as “would be ... effective in bringing the demand to the notice of the debtor” and “would have been such that the court would have ordered in the circumstances”.

[8] While the last address of the Debtor that was known to the Petitioner may have been the address of the Premises, after Marcus Lin had been informed on 8 February 2003 by a male Indian occupant of the Premises that the Debtor was not staying at the Premises, in the absence of contrary evidence suggesting that the Debtor continued to reside at the Premises as at 8 February 2003, it could not be said that substituted service by posting the statutory demand on the front door/gate of the Premises would be effective in bringing the statutory demand to the notice of the Debtor. Further, a court having knowledge of the statements made on 8 February 2003 by the male Indian occupant of the Premises to Marcus Lin would not have ordered substituted service of the statutory demand by posting the statutory demand on the front door/gate of the Premises. As the Debtor had provided the Petitioner with other contact particulars in his application forms, the Petitioner should have attempted to contact the Debtor through each of the alternative contact particulars. The Petitioner might be entitled to effect substituted service of the statutory demand on the Debtor by advertisement only if the Petitioner was unable to contact the Debtor through any of the alternative contact particulars provided by the Debtor, and the Petitioner had no knowledge of any other address of the Debtor. In the circumstances, the purported service of the statutory demand on the Debtor was irregular and not effected “in the prescribed manner” under section 62(a)(i) of the Bankruptcy Act read with rules 96(3), (4) and (6) of the Bankruptcy Rules.

[9] The case of Wong Kwei Cheong v ABN-AMRO Bank NV [2002] 3 SLR 594 was clearly distinguishable from the case before me. In that case, the court had set aside the service of a statutory demand by advertisement because the creditor had failed to comply with the pre-requisites for effecting substituted service of a statutory demand by advertisement. That case was not concerned with whether substituted service by posting at the debtor’s last known place of residence would be regular if the service clerk employed by the creditor’s solicitors had been informed by an occupant of those premises that the debtor was not staying there. In that case, the service clerk employed by the creditor’s solicitors had made three attempts to serve the statutory demand on the debtor at his last place of residence known to the creditor. On all three occasions, the premises were locked. The fact that the premises were locked did not negate the possibility that substituted service by posting the statutory demand at the premises might be “effective in bringing the demand to the notice of the debtor”. The creditor in that case had also failed to take reasonable steps to bring the statutory demand to the attention of the debtor because the creditor failed to inform the debtor’s solicitors of the statutory demand, even though they had been in close contact with the debtor’s solicitors.

[10] The requirements for proving service of a statutory demand are set out in rule 108 of the Bankruptcy Rules (Cap 20, R 1, 2002 Rev Ed), which provides as follows:

[11] Marcus Lin’s affidavit of service of the statutory demand did not explain why the mode of substituted service that he had employed “would have best ensured that the demand would be brought to the debtor’s attention”, as required by rule 108(3)(b) of the Bankruptcy Rules. Marcus Lin also failed to “specify a date by which ... the demand would have come to the debtor’s attention”, as required by rule 108(3)(d) of the Bankruptcy Rules. It was obvious from the facts of this case that Marcus Lin was not in a position to depose to either of these matters, because there was some evidence that the Debtor no longer resided at the Premises when Marcus Lin posted the statutory demand on the front door/gate of the Premises on 10 February 2003.

[12] Rule 108(6) of the Bankruptcy Rules requires the court to dismiss a bankruptcy petition based on a statutory demand if the court is not satisfied that the creditor has discharged the obligations imposed on the creditor by rule 96 of the Bankruptcy Rules. As the Petitioner had failed to discharge the obligations imposed on it by rule 96 of the Bankruptcy Rules, and as the Petitioner had failed to satisfy the requirements of section 62(a)(i) of the Bankruptcy Act by serving a statutory demand on the Debtor in the manner prescribed by rule 96 of the Bankruptcy Rules, I was required by rule 108(6) to dismiss the bankruptcy petition.