OCBC v Measurex: Default Judgment Amendment & Setting Aside - Guarantee Obligations

Oversea-Chinese Banking Corporation Ltd (OCBC) sued Measurex Corporation Bhd (Measurex) in the High Court of Singapore on 08 August 2002, seeking repayment of a loan under two Deeds of Guarantee. OCBC had provided banking facilities to Measurex Engineering Pte Ltd (M-Singapore), a subsidiary of Measurex, subject to the parent company's guarantees. OCBC obtained a default judgment against Measurex, which Measurex then sought to set aside, arguing irregularities in the writ and service, ambiguity in the judgment, and a lack of merit in the claim. The court dismissed Measurex's appeal, finding no irregularities, no ambiguity after amendment, and no real prospect of success in the defense.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Appeal Dismissed

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

OCBC sues Measurex for loan repayment under guarantee deeds. Court dismisses Measurex's appeal to set aside default judgment, finding no injustice or defense merit.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Oversea-Chinese Banking Corp LtdRespondent, PlaintiffCorporationJudgment for PlaintiffWon
Measurex Corp BhdAppellant, DefendantCorporationAppeal DismissedLost

3. Judges

Judge NameTitleDelivered Judgment
S RajendranJudgeYes

4. Counsels

Counsel NameOrganization
Lee Eng BengRajah & Tann
Meah Tze HuaRajah & Tann
Johnny CheoCheo Yeoh & Associates

4. Facts

  1. OCBC offered banking facilities to M-Singapore, subject to guarantees from M-Bhd.
  2. M-Bhd executed two Deeds of Guarantee in favor of OCBC.
  3. OCBC sent a letter to M-Bhd demanding repayment of US$937,500.
  4. M-Singapore was placed under judicial management.
  5. OCBC filed a writ against M-Bhd and served it on M-Singapore as process agent.
  6. M-Bhd claimed it only learned of the writ and default judgment later.
  7. The default judgment initially contained ambiguities regarding interest and charges.

5. Formal Citations

  1. Oversea-Chinese Banking Corp Ltd v Measurex Corp Bhd, Suit 921/2001, RA 38/2002, [2002] SGHC 173

6. Timeline

DateEvent
OCBC offered banking facilities to M-Singapore
Deeds of Guarantee executed by M-Bhd and received by OCBC
OCBC sent a letter to M-Bhd demanding repayment
M-Singapore placed under judicial management
Amount unpaid by M-Singapore stood at US$524,333.24
OCBC filed a writ against M-Bhd
Writ served on M-Singapore as process agent of M-Bhd
OCBC obtained judgment in default of appearance
M-Bhd allegedly came to know of the writ and default judgment
Default Judgement re-dated
Court dismissed M-Bhd's appeal

7. Legal Issues

  1. Setting Aside Default Judgment
    • Outcome: The court held that the default judgment should not be set aside because there was no irregularity, the ambiguity was removed by amendment, and the defense lacked a real prospect of success.
    • Category: Procedural
    • Sub-Issues:
      • Irregular Writ
      • Irregular Service
      • Ambiguity of Default Judgment
      • Merit of Defence
  2. Proper Service of Writ
    • Outcome: The court held that service of the writ on M-Singapore, as the process agent of M-Bhd, was sufficient service on M-Bhd.
    • Category: Procedural
  3. Validity of Guarantee
    • Outcome: The court held that the release of a guarantee by another party (Goldtron) did not prejudice OCBC's rights under the guarantees given by M-Bhd due to clause 8(d) in the Deeds of Guarantee.
    • Category: Substantive

8. Remedies Sought

  1. Monetary Damages
  2. Interest
  3. Banker's Charges
  4. Costs

9. Cause of Actions

  • Breach of Guarantee

10. Practice Areas

  • Commercial Litigation
  • Banking Litigation

11. Industries

  • Banking
  • Finance

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Harkness v Bell’s Asbestos and Engineering LtdQueen's Bench DivisionYes[1967] 2 QBD 729England and WalesFollowed for the principle that every omission or mistake in procedure is an irregularity that the court can rectify without injustice.
Philip Securities (Pte) v Yong Tet MiawHigh CourtYes[1988] SLR 594SingaporeFollowed for the principle that the court has jurisdiction to amend a judgment instead of setting it aside when the judgment was entered for an amount in excess of what was due.
Alpine Bulk Transport Co Inc v Saudi Eagle Shipping Co ("The Saudi Eagle")Court of AppealYes[1986] 2 LLR 221 CAEngland and WalesFollowed for the principle that to invoke the court's discretion to set aside a default judgment, the defendant must show that the defence has a real prospect of success and carries some degree of conviction.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Rules of Court 1997Singapore
Companies ActSingapore
O 2 r 1 Rules of CourtSingapore
O 20 r 11 Rules of CourtSingapore
O 12 r 4 Rules of CourtSingapore
O 3 r 2(2) Rules of CourtSingapore
s 227I Companies ActSingapore

15. Key Terms and Keywords

15.1 Key Terms

  • Deeds of Guarantee
  • Judicial Management
  • Default Judgment
  • Process Agent
  • Irregularity
  • Real Prospect of Success
  • SIBOR rate
  • Clause 8(d)

15.2 Keywords

  • Default Judgment
  • Guarantee
  • Service of Writ
  • Amendment
  • Singapore
  • Banking Facilities

17. Areas of Law

Area NameRelevance Score
Judgments and Orders80
Civil Practice75
Guarantee70
Service out of jurisdiction65
Pleadings60
Contract Law50
Banking and Finance40

16. Subjects

  • Civil Procedure
  • Contract Law
  • Banking
  • Guarantees