Panin International Credit (S) Pte Ltd v Ngan Ching Wen

Woo Bih Li J:

[1] This was an appeal by Ngan Ching Wen (“Ngan”) against the decision of Assistant Registrar Jordan Tan (“AR Jordan Tan”) in Summons No 600081 of 2010, in which AR Jordan Tan set aside the orders made by Assistant Registrar Then Ling (“AR Then Ling”) in Summons No 600063 of 2010, re-heard Summons No 600063 of 2010, and ordered, inter alia, that the judgment dated 22 December 1999 entered against Ngan in default of Ngan’s appearance in Suit No 1404 of 1999 (“the Judgment”) be set aside. Panin International Credit (S) Pte Ltd (“Panin”) did not appeal against AR Jordan Tan’s dismissal of Panin’s application for leave to enter a fresh default judgment against Ngan but Ngan appealed against AR Jordan Tan’s decision to set aside the Judgment. Summons No 600063 of 2010 was an unusual application by a plaintiff, ie, Panin, to set aside a default judgment that the plaintiff itself had entered against a defendant, ie, Ngan.

[2] I dismissed Ngan’s appeal on 29 October 2010.

[3] A detailed chronology of events is annexed at Schedule 1 below. This is based on a table of chronology helpfully prepared by counsel for Panin. Crucially, Panin entered the Judgment on 22 December 1999. On 16 February 2000, it applied to register the Judgment in Malaysia. The Judgment was registered in Malaysia on 9 April 2001. Notice of registration of the Judgment was served on Ngan on 6 February 2004. Suit No 1404 of 1999 is a moneylender’s action and, pursuant to O 79 r 4 of the Rules of Court (Cap 322, R5, 1999 Rev Ed) in Singapore (“Singapore ROC 1999”), leave of the Court was required before the Judgment could be entered. Panin had not applied for such leave and this irregularity was raised by Ngan on 19 November 2001.

[4] Between 2001 and 2009, Ngan contested the registration of the Judgment via an application to strike out Panin’s application to register the Judgment and, when this eventually failed, via applications to set aside both the registration of the Judgment and the service of notice of registration of the Judgment. Ngan’s applications to set aside both the registration of the Judgment and the service of notice of registration of the Judgment were dismissed by the Senior Assistant Registrar (“SAR”) in Malaysia on 22 December 2004 and Ngan’s appeals against the SAR’s decision were dismissed by the Malaysia High Court on 15 August 2007. On further appeal by Ngan (in Civil Appeal Nos. W-03-157-2007 and W-03-159-2007), however, the Malaysia Court of Appeal (by a majority) allowed the appeals on 26 November 2009 and set aside the registration of the Judgment. According to Ngan’s written submissions dated 20 September 2010 and the affidavit of Panin’s Malaysia solicitor filed on 3 June 2010, the reason for the Malaysia Court of Appeal’s decision was that the Judgment had been entered without leave of the Singapore High Court, in contravention of O 79 r 4 of the Singapore ROC 1999. Panin’s application for leave to appeal to the Malaysia Federal Court was dismissed on 17 May 2010.

[5] Panin had also filed a Bankruptcy Notice against Ngan in Malaysia on 28 October 2008 but this was successfully set aside by Ngan before the SAR on 10 September 2009. Whilst Panin had filed an appeal against the SAR’s decision, this appeal was withdrawn on 4 February 2010.

[6] Whilst the parties had engaged in litigation in the courts of Malaysia on the registrability of the Judgment, between 2001 and 2009, neither party applied to the Singapore High Court to set aside the Judgment. It was only after Panin’s application to appeal against the Malaysia Court of Appeal’s decision to set aside the registration of the Judgment was dismissed that Panin applied, on 24 May 2010, via Summons No 600063 of 2010 filed in the Singapore High Court, to set aside the Judgment and enter a fresh judgment against Ngan.

[7] Ngan did not attend the hearing of Summons No 600063 of 2010 on 7 June 2010 where AR Then Ling set aside the Judgment and granted Panin leave to enter a fresh default judgment against Ngan. On 21 July 2010, Ngan applied, via Summons No 600081 of 2010, for Summons No 600063 of 2010 to be re-heard and for the orders made in Summons No 600063 of 2010 to be set aside. At the hearing of Summons No 600081 of 2010 on 6 August 2010, AR Jordan Tan agreed with counsel for Ngan that there had not been full disclosure of the circumstances of the case to AR Then Ling. For this reason and the fact that AR Then Ling’s orders had been granted in Ngan’s absence, AR Jordan Tan exercised his power under O 32 r 5(3) of the Rules of Court (Cap 322, R 5, 2006 Rev Ed) (“Singapore ROC”) and re-heard Summons No 600063 of 2010. AR Jordan Tan set aside the orders made by AR Then Ling. He then proceeded to set aside the Judgment and dismissed Panin’s application to enter a fresh default judgment against Ngan. He also ordered that Ngan be given an extension of time until 5 October 2010 to file a Memorandum of Appearance and that upon the filing of a Notice of Appeal against his decision by Ngan, the filing of a Defence would be stayed with the timelines for filing the Defence to be decided by the Judge hearing the appeal.

[8] Ngan did not question the court’s jurisdiction to set aside a default judgment even when the application to do so was made by a plaintiff. The court has an unfettered discretion (pursuant to O 13 r 8 of the Singapore ROC) to set aside the Judgment on such terms as it thinks fit. This discretion is very wide and the concern of the court is the justice of the case (see, eg, Mercurine Pte Ltd v Canberra Development Pte Ltd [2008] 4 SLR(R) 907 (“Mercurine”) at [35], [72], [76] and [99]; MacQuarie Bank Ltd v Beaconsfield and Others [1992] 2 VR 461 at 466; Cannan v Reynolds 119 ER 493 at [305] – [306]).

[9] The underlying reason for Panin’s application to set aside the Judgment appeared to be to allow Panin to obtain a judgment that would be enforceable in Malaysia. In my opinion, subject to considerations of prejudice to the defendant, there is good reason for setting aside a default judgment where the default judgment is not capable of being enforced in the foreign jurisdiction in which the defendant’s assets are located such that the plaintiff’s claim would effectively be lost. In this regard, I would adopt the reasoning of the English High Court in Messer Griesheim GmbH v Goyal MG Gases PVT Ltd [2006] EWHC 79 (Comm) (“Messer Griesheim”) where the court set aside a default judgment and entered summary judgment against the defendant instead because the default judgment was not capable of being enforced in India where the defendant’s assets were located. Langley J stated:

The decision in Messer Griesheim applied r 13.3(1)(b) of the Civil Procedure Rules 1998 (SI 1998 No 3132) (UK) (“CPR 1998”) which states that “the court may set aside or vary a [default judgment] if ... it appears to the court that there is good reason why the judgment should be set aside or varied”. Notwithstanding that O 13 r 8 of the Singapore ROC is worded differently in that it states that the court “may, on such terms as it thinks just, set aside or vary any [judgment entered in default of appearance]”, I was of the view that the reasoning in Messer Griesheim should still apply in the present case. In particular, I noted that Part 13 of the CPR 1998 has not effected any change in practice under O 13 r 9 of the Rules of Supreme Court 1965 in force in the UK before the CPR 1998 was introduced (see Civil Procedure, The White Book Service 2010, vol 1 (London: Sweet & Maxwell, 2010 ed) at p 397) and that O 13 r 9 of the Rules of Supreme Court 1965 is worded in a similar manner to O 13 r 8 of the Singapore ROC.

[11] The Judgment was a valid one until it was set aside. While it may have been risky, and arguably unwise, for Panin to proceed with an irregular judgment, that was a course of action it was not precluded from taking. After all, an irregular judgment will not necessarily be set aside (see Mercurine).

[12] The long delay in Panin applying to set aside the Judgment was not because it was doing nothing. It was taking steps in Malaysia which were rigorously resisted by Ngan.

[13] Ngan submitted that he would be prejudiced if the Judgment was set aside because he was entitled to rely on the limitation period of six years for the registration of a judgment as set out in the Malaysia Reciprocal Enforcement of Judgments Act 1958 (Act 99) (“the Malaysia REJA 1958”). Section 4 of the Malaysia REJA 1958 states:

[14] Ngan also raised arguments of election and approbation and reprobation against Panin. The principle of election at common law prevents a claimant who, with full knowledge, has made an unequivocal choice between two inconsistent rights from afterwards pursuing the abandoned right (see Halsbury’s Laws of England vol 16(2) (Butterworths, 4 Ed Reissue, 2003) at para 962; Nexus Communications Group Limited v Michael Lambert, Pamela Rosemary Lambert, Kenneth James Munn [2005] EWHC 345 (Ch) (“Nexus Communications Group Limited”) at [66] – [67]). The principle of equitable election and the doctrine of approbation and reprobation preclude a person who has exercised a right from exercising another right which is alternative to and inconsistent with the right he has exercised (Treasure Valley Group Ltd v Saputra Teddy and another (Ultramarine Holdings Ltd, intervener) [2006] 1 SLR(R) 358 at [31]) and prevent a person from accepting and rejecting the same instrument or judgment, for example by taking the benefit of an instrument or judgment without taking its accompanying burden or later contending that the instrument or judgment is invalid (Nexus Communications Group Limited at [28]). Contrary to Ngan’s submission, in my opinion, the principle of election (both at common law and in equity) and the doctrine of approbation and reprobation did not apply in the present case. Panin’s failure to comply with O 79 r 4 of the Singapore ROC 1999 did not nullify the Judgment (see O 2 r 1 of the Singapore ROC 1999). There was no inconsistency between Panin’s decision to seek to enforce the irregular (but valid) Judgment and its application to set aside the Judgment once it became clear that it did not have the right to enforce the Judgment in Malaysia. Panin consistently sought to enforce the Judgment in Malaysia and did not give Ngan the impression that it would abandon its claim against Ngan if its efforts at enforcing the irregular Judgment failed. Moreover, Panin did not derive any benefit from the Judgment as it was unable to enforce the Judgment against Ngan in Malaysia and the Bankruptcy Notice it filed against Ngan in Malaysia had also been set aside.

[15] Counsel for Ngan referred me to the Malaysia Court of Appeal decision of Macquarie (Malaysia) Sdn Bhd v HSBC Bank Malaysia Berhad and Anor (Civil Appeal nos. W-03-10-2006 and W-03-11-2006) (“Macquarie”) in which the Malaysia Court of Appeal did not allow a plaintiff to set aside a judgment that it had entered 47 months ago. In Macquarie, the plaintiff had entered a regular default judgment against the second of two defendants. After the sealed default judgment was extracted, the first defendant applied to amend its defence to plead the defence of election. The first defendant averred that the plaintiff had elected to claim against the second defendant and was estopped from claiming against the first defendant. The plaintiff contested the first defendant’s application to amend its defence but its leave to appeal to the Federal Court against the Court of Appeal’s decision to allow the amendment was eventually dismissed. The plaintiff then filed an application to set aside the default judgment against the second defendant. The Malaysia Court of Appeal noted (at [54]) that the application to set aside the default judgment was made for the purpose of forestalling, pre-empting or preventing the first defendant from raising the issue of election in its amended defence at trial and that if the application was allowed, this would have the effect of stifling or negating the earlier order of the Court of Appeal which allowed the first defendant to amend its defence. The Malaysia Court of Appeal stated that this was “an obvious illustration of an abuse of the process of the court which should not be permitted”. The Malaysia Court of Appeal further held (at [58]) that the act of the plaintiff’s solicitors in obtaining the default judgment could “hardly be construed as a mistake” since the plaintiff’s solicitors must have properly and meticulously considered the implications of the default judgment when they obtained and perfected it and the plaintiff’s solicitors made no effort to set aside the default judgment timeously. The facts of Macquarie are very different from those in the present case. Unlike in Macquarie, the Judgment that Panin obtained in this case was irregular and such irregularity had clearly arisen by mistake. Moreover, to allow the Judgment to be set aside in the present circumstances would not stifle or negate, and in no way contradicts, the Malaysia Court of Appeal’s decision not to allow registration of the Judgment on the ground that it was irregular.

[16] Ngan has pointed out that the affidavit of Panin’s Singapore counsel, filed on 24 May 2010 in support of Summons No 600063 of 2010, erroneously stated, at paragraph 5, that the irregularity in the Judgment (see [3] above) was brought to Panin’s attention “in or about 2008”. Counsel for Ngan drew my attention to [34] of the Court of Appeal’s decision in Mercurine which cited the decision of this court in Lee Theng Wee v Tay Chor Teng [2003] SGHC 173 (“Lee Theng Wee”) as an example of a case where the defendant’s delay in making a setting-aside application was not looked upon kindly by the court. The defendant in Lee Theng Wee had “some prospect of success” in establishing his defence but the High Court held that his very long delay before making his setting-aside application, coupled with the absence of a valid reason for the delay, was fatal to his application. A further reason for the High Court’s decision to uphold the assistant registrar’s dismissal of the defendant’s setting-aside application in Lee Theng Wee was that the defendant had not been truthful in the supporting affidavit which he filed for his setting-aside application. Whilst a failure to disclose material facts and/or the truth in a supporting affidavit for a setting-aside application may result in a dismissal in the application, the circumstances must be looked at in the round. In my opinion, the error in the supporting affidavit of Panin’s counsel in the present case did not outweigh the justice of the case in favour of setting aside the Judgment.

[17] With regards to Ngan’s allegation that he has repaid the amount claimed by Panin, that is an issue going to the merits of Panin’s claim. Panin has been denied a regular judgment and Ngan will have his day in court.

Chronology of events as discussed at the hearing on 14 October 2010 and based on the table exhibited in Panin’s written submissions dated 8 October 2010.