Public Bank Berhad v Tan Ping Huang Edwin @ Chen Binghuang (MA-22NCC-7-04/2025)

TAN PING HUANG EDWIN @ CHEN BINGHUANG (NO. K/P SINGAPURA: S8224254F)

TAN JUNE TENG COLIN @ CHEN JUNTING (NO. K/P SINGAPURA: S8323775I)

MDSA DEVELOPMENT SDN. BHD. (DAHULUNYA DIKENALI SEBAGAI "FUYUU DEVELOPMENT SDN. BHD.") [No. Syarikat: 200801003772 (805056-A)] ... DEFENDANTS GROUNDS OF JUDGMENT (The Plaintiff's application for leave to enter judgment in default of appearance - Enclosure 9; and the 1st and 2nd Defendants' application for leave to file a defence out of time - Enclosure 13) A. INTRODUCTION [1] Before the Court are two interlocked applications. The first is the Plaintiff's application under Order 83 rule 4(1) of the Rules of Court 2012 ("the ROC 2012") for leave to enter judgment in default of appearance against the Defendants (Enclosure 9). The second is the Defendants' application under Order 12 of the ROC 2012 for leave to file and serve a defence notwithstanding that appearance was entered out of time (Enclosure 13). The two applications were heard together. They are, in substance, two aspects of a single controversy: if leave to defend out of time is granted, the occasion for a default judgment falls away; if it is refused, the Plaintiff's application stands to be considered. [2] The underlying action is a creditor's claim upon guarantees. The Plaintiff, a licensed bank, sues the Defendants as security parties for sums said to be due under a fixed loan facility extended to a borrower now in liquidation. The 1st and 2nd Defendants stand as individual guarantors and the 3rd Defendant as corporate guarantor. [3] These Grounds concern the 1st and 2nd Defendants alone. The determination of Enclosures 9 and 13 as against them had earlier stood deferred, each having been adjudged bankrupt by the General Division of the High Court of the Republic of Singapore on 30 October 2025; the applications now fall to be determined as against them following the leave granted to the Plaintiff under section 8(1)(a) of the Insolvency Act 1967 to continue this action against them (Enclosure 51). The like applications as against the 3rd Defendant have already been disposed of and are not revisited here. [4] The controversy reduces to three matters. The first is whether the Writ of Summons and the Statement of Claim were duly served on the 1st and 2nd Defendants, who assert that they never received service. The second is whether, the appearance having been entered out of time, the 1st and 2nd Defendants ought to be granted leave to serve a defence-a question turning upon the length of and the explanation for the delay, and upon whether the proposed defence raises a bona fide issue meriting trial. The third is the disposal of the Plaintiff's application for leave to enter judgment in default of appearance, which follows from the first two. B. MATERIAL FACTS AND PROCEDURAL HISTORY [5] The facility is a fixed loan of RM4,290,000.00 granted by the Plaintiff under Account No. 2-0993453-33 (Note No. 00010) to Prolific Properties Sdn Bhd [Company No. 201101018317 (946453-P)] ("the borrower"), which was wound up by order of this Court dated 1 August 2024 made in Companies (Winding-Up) Petition No. MA-28NCC-29-05/2024. These matters are not in dispute on the affidavits. [6] Repayment was secured, among other instruments, by a Memorandum of Charge (Borang 16A) dated 11 July 2012, a first-party charge created by the borrower over two parcels of land held under Pajakan Negeri, namely title No. 67400, Lot 12069, and title No. 67401, Lot 12070, both in Kawasan Bandar XXXIX, Daerah Melaka Tengah, Negeri Melaka ("the charged properties"). The 1st and 2nd Defendants executed individual guarantees and the 3rd Defendant a corporate guarantee. The security documents were prepared and witnessed by the Defendants' own solicitors, Messrs Chee Siah Le Kee & Partners. The Plaintiff is separately pursuing foreclosure of the charged properties against the borrower as chargor by Originating Summons No. MA-24FC-89-05/2025. [7] The Writ of Summons (Enclosure 1) and the Statement of Claim (Enclosure 2), dated respectively 16 and 15 April 2025, were filed on 16 April 2025 and were dispatched to the Defendants by prepaid registered post on 18 April 2025, as deposed in the Affidavit of Service of Samsuri bin Ithnin affirmed on 6 May 2025 (Enclosure 4). The Plaintiff's case is that, by clause 53.2 of the Facilities Agreement dated 27 July 2012, service was thereupon deemed effected forty-eight hours after posting, so that the time for entering appearance expired on 5 May 2025. The 1st and 2nd Defendants dispute that they were served at all. On 6 May 2025 the Plaintiff filed the Affidavit of Service (Enclosure 4) and a Certificate of Non-Appearance (Enclosure 5). [8] The Memorandum of Appearance (Enclosure 6) was filed on 14 May 2025. On 15 May 2025 the Plaintiff filed its application for leave to enter judgment in default of appearance (Enclosure 9). On 19 June 2025 the 1st and 2nd Defendants filed their application for leave to file a defence out of time (Enclosure 13). The affidavits exchanged were Enclosures 10,11 and 12 (on Enclosure 9) and Enclosures 14,19 and 23 (on Enclosure 13), the Plaintiff's affidavits being affirmed by Lim Chee Hwa and the Defendants' affidavits by the 2nd Defendant, Tan June Teng Colin @ Chen Junting. [9] The 1st and 2nd Defendants are Singapore citizens. Their case on the facts, deposed in the affidavits of the 2nd Defendant affirmed on 30 May 2025 (Enclosure 11) and 18 June 2025 (Enclosure 14), is that they did not receive the registered articles; that they learned of the action only through the management of the 3rd Defendant; that they then experienced difficulty in retaining solicitors who were not on the Plaintiff's panel; and that, having retained their present solicitors on or about 14 May 2025, they entered appearance the same day. The tracking records of Pos Malaysia for the three registered articles (RY589963766MY, RY589963752MY and RY589963749MY), exhibited as "TJT-2" to Enclosure 11, are said to show that delivery to the 1st and 2nd Defendants was unsuccessful and that the articles were returned. A draft Statement of Defence is exhibited as "TJT-3" to Enclosure 14. [10] The Plaintiff's position, deposed in the affidavits of Lim Chee Hwa (Enclosures 10, 12 and 19), is that service was duly effected in the agreed contractual manner; that the 3rd Defendant received the articles on 23 April 2025; and that the 1st and 2nd Defendants had executed the security documents through their own solicitors and had, after receiving the Writ, approached the Plaintiff to discuss a settlement. C. ISSUES FOR DETERMINATION [11] Three issues arise:

whether the Writ of Summons and the Statement of Claim were duly served on the 1st and 2nd Defendants;

whether, the appearance having been entered out of time, the 1st and 2nd Defendants ought to be granted leave to serve a defence - which requires consideration of, first, the delay and the explanation for it, and secondly, whether the proposed defence discloses a bona fide issue meriting trial; and

whether the Plaintiff ought to be granted leave to enter judgment in default of appearance against the 1st and 2nd Defendants. D. THE LEGAL FRAMEWORK [12] The dispositive provision is Order 12 rule 5 of the ROC 2012, which provides: "5. (1) A defendant may not enter an appearance in an action after judgment has been entered therein except with the leave of the Court.

Except as provided by paragraph (1), nothing in these Rules or any writ or order thereunder shall be construed as precluding a defendant from entering an appearance in an action after the time limited for appearing, but if a defendant enters an appearance after that time, he shall not, unless the Court otherwise orders, be entitled to serve a defence or do any other thing later than if he had appeared within that time." [13] Two features of rule 5(2) require notice. First, a defendant who appears after the time limited is not thereby shut out from defending; the appearance is good. What the rule withholds, until the Court orders otherwise, is the entitlement to serve a defence later than if appearance had been entered in time. Secondly, the words "unless the Court otherwise orders" confer a discretion. The rule is, in that sense, both mandatory and discretionary: leave is required, but the Court is empowered to grant it. [14] Service in accordance with a contract is regulated by Order 10 rule 3 of the ROC 2012, the effect of which is that where a contract specifies the manner in which originating process is to be served, and the process is served in that manner, it is to be deemed duly served. The contractual term relied upon is clause 53.2 of the Facilities Agreement, which provides that legal process, including the Writ and pleadings, may be served on the security party by prepaid registered post to its last known address, and "shall be deemed to have been duly served and duly received ... upon the expiry of forty-eight (48) hours after the time of posting". [15] The extension of time to take a step out of time is governed by Order 3 rule 5; and Order 1A and Order 2 are engaged by the contention that the late appearance is a mere irregularity. The law on these last provisions need not be set out at length, for they are not seriously in contest; the real controversy lies in the application of rule 5(2) and clause 53.2 to the facts. E. ANALYSIS AND DETERMINATION

Service On The 1st And 2nd Defendants [16] The first issue is whether service was duly effected. Where parties have agreed a contractual mode of service, service effected in that manner is good service, and a contractual deeming provision takes effect according to its terms. In Amanah Merchant Bank Bhd v Lim Tow Choon [1994] 1 MLJ 413 (SC) the Supreme Court held that the words "shall be deemed" in a clause of that character mean "shall be regarded as," so that the deeming is not a rebuttable presumption. That reasoning was applied to the service of originating process in TA Securities Bhd v Ng Yen Ling [2000] 3 MLJ 743 (HC), where, the writ having been sent by prepaid registered post to the defendant's address under a contractual clause coupled with deemed service and read with the statutory deeming for contractual service, the Court held that the defendant was precluded from showing that she had not received the writ and that service was to be taken as conclusive. [17] Clause 53.2 of the Facilities Agreement, to which the 1st and 2nd Defendants subscribed as security parties, provides for service of legal process by prepaid registered post to the last known address, deemed effected forty-eight hours after posting. The Writ and Statement of Claim were posted to the Defendants on 18 April 2025. Read with Order 10 rule 3 of the ROC 2012, the contractual deeming took effect, and service on the 1st and 2nd Defendants was complete and effective on 20 April 2025. [18] It follows that the tracking records exhibited as "TJT-2" to Enclosure 11, said to show unsuccessful delivery, do not assist the 1st and 2nd Defendants. The very purpose of an agreed deeming provision of this kind is to fix the time and the fact of service independently of actual receipt. On the authority of Amanah Merchant Bank and TA Securities, the deeming is conclusive and is not displaced by proof, still less by mere assertion, of non-receipt. Having contracted for service in this manner, the 1st and 2nd Defendants cannot now disavow the consequence of the term to which they agreed. The first issue is determined against them: service was regular and effective, time for appearance ran from 20 April 2025 and expired on 5 May 2025.

(ii) Leave To Serve A Defence Out Of Time [19] The appearance entered on 14 May 2025 was effective. Order 12 rule 5(1) precludes appearance only after judgment, and no judgment had been entered. To that extent the position that the appearance stands, and that the only question is leave to serve a defence, is correct; it accords with Wan Mohd Sofian bin Wan Md Saad v MBF Finance Bhd [2000] 5 MLJ 319 (HC) and Aleykutty James v Syed Putra bin Syed Omar Shahabudin & Anor [1979] 1 MLJ 238b (HC), in each of which the late-appearing defendant's entitlement to serve a defence was treated as a matter for the leave of the Court. The live question is therefore the exercise of the discretion conferred by the closing words of rule 5(2). [20] The contention that this discretion is displaced - that rule 5(2) operates with mandatory and unqualified effect by force of the word "shall" - cannot be accepted. Public Prosecutor v Yap Min Woie [1996] 1 MLJ 169 (FC), in which the Federal Court held the word "shall" in sections 12 and 28 of the Juvenile Courts Act 1947 to be mandatory, is of no assistance here. The "shall" in that statute carried no discretionary saving; rule 5(2), by contrast, withholds the entitlement to serve a defence "unless the Court otherwise orders." Those words are the language of discretion. The rule does not deny leave; it requires that leave be sought and judicially considered, as Khairy Jamaluddin Abu Bakar v Mohd Rasyiq bin Mohd Alwi [2022] MLJU 3464 (HC) and Yong Weoi Kee v Savelite Engineering Sdn Bhd [2016] MLJU 657 (HC) confirm. [21] How the discretion is to be exercised is well settled. In Abdul Rahim Ponniah bin Abdullah v Kulim Intensive Driving Centre Sdn Bhd [2000] 6 MLJ 584 (HC) the relevant considerations were stated as: whether the delay is unjustified or unreasonable; the reasons for the delay; whether the defendant has a good defence; and whether the plaintiff would be prejudiced if the application were granted. To these is to be added the principle, affirmed in Khor Cheng Wah v Sungai Way Leasing Sdn Bhd [1997] 1 CLJ 396 (CA) and applied in Kiwi Office Equipment Sales and Services Sdn Bhd v Benedict Pui Jin Hung [2021] MLJU 481 (HC), that a litigant seeking the Court's indulgence must move timeously and furnish a satisfactory explanation, the Court retaining a discretion to refuse relief to an indolent litigant. Of these considerations, the existence of a defence on the merits is ordinarily the most important, for if no triable defence is shown, the grant of leave would be a barren exercise.

(iii) The Delay And Its Explanation [22] The delay in entering appearance was nine days, and not the seven days advanced for the Defendants. The seven-day figure is reached by reckoning from 7 May 2025, the date on which the time would have expired had it run from the 3rd Defendant's actual receipt of the articles on 23 April 2025. Once it is held, as it has been, that service on the 1st and 2nd Defendants was deemed complete on 20 April 2025, the time for appearance expired on 5 May 2025 and the appearance on 14 May 2025 was nine days late. [23] A delay of nine days is, in itself, short. The further period until the filing of the present application on 19 June 2025 is more substantial, but it is explained: the 1st and 2nd Defendants are foreign individuals who learned of the action indirectly and encountered difficulty in retaining solicitors unconnected with the Plaintiff's panel - a difficulty which, given the Plaintiff's standing as a major lending institution, is neither fanciful nor implausible. There is no indication that the delay was contumelious or designed to obstruct. I am satisfied that the delay was not deliberate and that it has been adequately explained. To that limited extent the considerations of delay and explanation do not tell against the 1st and 2nd Defendants. [24] It was urged that the delay is in any event a mere procedural irregularity curable under Order 1A of the ROC 2012. That submission must be approached with the caution stated by the Federal Court in Duli Yang Amat Mulia Tunku Ibrahim Ismail Ibni Sultan Iskandar Al-Haj v Datuk Captain Hamzah Mohd Noor & Another Appeal [2009] 4 CLJ 329 (FC): Order 1A enables the Court to give effect to substantive justice over technical non-compliance, but it cannot be invoked to override a mandatory requirement of the Rules where a party has intentionally disregarded it. Here there was no intentional disregard; and, in any event, Order 1A need not be pressed into service to override rule 5(2), for the discretion to permit the late service of a defence is contained within rule 5(2) itself. The true question is therefore not whether the delay is curable, but whether the discretion ought to be exercised - and that turns upon the merits of the proposed defence.

(iv) The Proposed Defence [25] For leave of this kind a defendant need not demonstrate a defence that will certainly succeed; it is enough that the proposed defence is bona fide and raises an issue meriting trial. As was observed in Logan Ravishankar v My IT Asia Sdn Bhd [2015] MLJU 905 (HC), what is looked for in the draft defence is that it is prima facie plausible, free of the marks of a sham, and discloses an arguable case or an issue fit for trial. That disputes should, where possible, be resolved on their merits rather than on technicality - the principle affirmed in Beauford Baru Sdn Bhd v Gopala Krishnan VK Gopalan [2002] 6 MLJ 134 (HC) is not in doubt. The question is whether the draft defence exhibited as "TJT-3" to Enclosure 14 meets that threshold. Examined, it advances four matters, of which none, alone or together, discloses an issue meriting trial. [26] First, it is said that the claim is premature because the Plaintiff ought to have realised the charged properties and applied the proceeds before suing the guarantors. This is not a defence known to the law of guarantee. A creditor holding both a guarantee and a security is not, in the absence of express stipulation, bound to realise the security before enforcing the guarantee; the guarantor's liability is independent, and the creditor may proceed upon the guarantee and pursue its remedies against the security concurrently. The 1st and 2nd Defendants point to no term of their guarantees requiring prior realisation of the charged properties. The "double recovery" said to follow is, moreover, illusory: any realisation of the security goes in reduction of the guaranteed debt, not in addition to it, and credit for it is given at the stage of satisfaction. The contention discloses no triable issue. [27] Secondly, objection is taken that the Plaintiff's reliance on the 1st and 2nd Defendants being the "alter ego" of the borrower was not pleaded. It is correct, as Samuel Naik Siang Ting v Public Bank Bhd [2015] 6 MLJ 1 (FC) confirms, that a party is bound by its pleadings and may not rely on an unpleaded case. But that principle furnishes the 1st and 2nd Defendants with no defence. Their liability rests upon the guarantees they executed, not upon any characterisation of them as the alter ego of the borrower. Whether or not the alter ego allegation is open to the Plaintiff, the guarantee liability is unaffected. The point, even if good, defeats nothing. [28] Thirdly, it is asserted that the sum claimed is "very high and wrong." A bare and unparticularised challenge to quantum is not a triable issue. The 1st and 2nd Defendants identify no error in the computation, plead no payment left unaccounted for, and advance no alternative figure. The sum claimed is a liquidated amount carried in the facility account, computed to a stated date and at stated rates. An unsupported assertion that the figure is too high does not, without more, raise an issue fit for trial. [29] Fourthly, reliance was placed on the absence of any admission, the approaches to settlement made after receipt of the Writ being said to have been without prejudice. On this the 1st and 2nd Defendants are correct: communications genuinely directed at the settlement of a dispute are protected, and the Plaintiff may not rely on the fact that the Defendants approached it to discuss settlement as an admission of liability or of the sum due. But this conclusion, while it removes one of the Plaintiff's contentions, supplies the 1st and 2nd Defendants with no positive defence. That a party has made no admission is not itself a defence to the claim. [30] Standing back, the proposed defence amounts to a general denial coupled with a legally untenable plea of prematurity. It does not engage the substance of the claim: it does not deny the execution of the guarantees, the drawing down of the facility by the borrower, the borrower's default, or the recall of the facility. The 1st and 2nd Defendants executed the security documents through their own solicitors and stood as guarantors of a facility of which the whole was advanced. Tested against the threshold in Logan Ravishankar, the draft defence does not disclose a bona fide issue meriting trial. [31] It follows that, although the delay was short and explained, the decisive consideration - the existence of a defence on the merits - is absent. Where no triable defence is shown, the grant of leave to defend out of time would serve no purpose but to postpone the inevitable, to the prejudice of the Plaintiff and the waste of the Court's time. The discretion under rule 5(2) ought not to be exercised in favour of the 1st and 2nd Defendants.

Leave To Enter Judgment In Default Of Appearance [32] It follows from the determination of the first two issues that the foundation for the 1st and 2nd Defendants' application falls away. Service was regular; the time for appearance expired on 5 May 2025 without appearance; and no defence on the merits has been shown. The conditions for the entry of judgment in default of appearance are satisfied, and there is no reason, in the exercise of discretion, to withhold leave. Leave to enter judgment in default of appearance against the 1st and 2nd Defendants is granted. [33] One consequential matter requires notice. The 1st and 2nd Defendants are undischarged bankrupts under the orders of the Singapore court of 30 October 2025, and the action proceeds against them only by the leave granted under section 8(1)(a) of the Insolvency Act 1967 (Enclosure 51). The judgment now authorised must conform to the basis of that leave. It is to be enforceable against the 1st and 2nd Defendants only by the lodging of a proof of debt in their respective bankruptcies, and not by execution that would disturb the pari passu distribution of their estates. F. CONCLUSION [34] The 1st and 2nd Defendants contracted for the very mode of service of which they now complain, and the defence they seek leave to file raises nothing fit for trial. A short and explained delay cannot, of itself, justify keeping alive a claim against which no answer on the merits has been shown. The discretion to relieve against the late appearance is therefore not exercised, and the Plaintiff is entitled to enter judgment in default of appearance against the 1st and 2nd Defendants, that judgment being enforceable only through the bankruptcy process. G. ORDERS OF THE COURT [35] As against the 1st and 2nd Defendants, the Court orders that:

the 1st and 2nd Defendants' application for leave to file a defence out of time (Enclosure 13) is dismissed;

the Plaintiff's application for leave to enter judgment in default of appearance (Enclosure 9) is allowed, and the Plaintiff is at liberty to enter judgment in default of appearance against the 1st and 2nd Defendants in the terms of the Statement of Claim (Enclosure 2), namely for payment of RM2,097,527.71 as at 2 April 2025 due under the said facility; interest on that sum at 3.50% per annum above the Plaintiff's base lending rate (6.27% per annum as at 2 April 2025, subject to variation), calculated on monthly rests, together with additional interest on monthly arrears at 1.00% per annum from 3 April 2025 until full settlement; and the costs of the action;

the costs of both applications (Enclosures 9 and 13) shall be paid by the 1st and 2nd Defendants to the Plaintiff in the sum of RM 15,000;

the judgment entered pursuant to paragraph (b) above, together with the costs ordered under paragraph (c) above, shall be enforceable against the 1st and 2nd Defendants only by way of proof of debt in their respective bankruptcies pursuant to the leave granted in Enclosure 51, and not by execution. Dated 25 June 2026 (MELAKA) Lawyer For Plaintiff Encik Chew Wee Kian bersama Cik Melissa Ong Bee Ying Tetuan H S Chew & Co. Peguamcara dan Peguambela No. 543-A (1$^{st}$ Floor), Taman Melaka Raya, 75000 Melaka.