BNP Paribas v Polynesia Timber: Substituted Service & Jurisdiction in Cross-Border Debt Recovery

In BNP Paribas (formerly known as Banque National De Paris) v Polynesia Timber Services Pte Ltd and Another, the High Court of Singapore heard an appeal by BNP Paribas against the decision of the Deputy Registrar to set aside the substituted service and default judgment against the second defendant, Philip Ling Lee King, who was residing in Kuala Lumpur. The case concerned the service of a writ of summons out of jurisdiction and the validity of substituted service. The court allowed the appeal, ordering the plaintiffs to re-serve the writ of summons within jurisdiction, while upholding the default judgment if the second defendant failed to appoint solicitors to accept service.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Appeal Allowed

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

BNP Paribas sued Polynesia Timber and its guarantor. The court addressed substituted service validity on a Malaysian resident and cross-border jurisdiction.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
BNP Paribas (formerly known as Banque National De Paris)Plaintiff, AppellantCorporationAppeal AllowedWon
Polynesia Timber Services Pte LtdDefendantCorporationJudgment in Default of AppearanceLost
Philip Ling Lee KingDefendant, RespondentIndividualAppeal DismissedLost

3. Judges

Judge NameTitleDelivered Judgment
Lai Siu ChiuJudgeYes

4. Counsels

Counsel NameOrganization
Herman JeremiahHelen Yeo & Partners
Vivian LimHelen Yeo & Partners
Michael PalmerHarry Elias Partnership
Chenthil KumarasinghamHarry Elias Partnership

4. Facts

  1. BNP Paribas granted loan facilities to Polynesia Timber Services Pte Ltd.
  2. The loan facilities were guaranteed by the second defendant, Philip Ling Lee King.
  3. Polynesia Timber Services Pte Ltd defaulted on the loan repayment.
  4. BNP Paribas commenced proceedings against both defendants.
  5. Service on the second defendant in Kuala Lumpur proved difficult.
  6. The plaintiffs applied for and obtained an order for substituted service on the second defendant.
  7. The second defendant applied to set aside the substituted service and default judgment.

5. Formal Citations

  1. BNP Paribas (formerly known as Banque National De Paris) v Polynesia Timber Services Pte Ltd and Another, Suit 152/2000, [2002] SGHC 56

6. Timeline

DateEvent
Loan facilities granted to Polynesia Timber Services Pte Ltd by BNP Paribas.
BNP Paribas cancelled loan facilities and demanded repayment.
BNP Paribas demanded repayment from the second defendant as guarantor.
Last installment payment made by Polynesia Timber Services Pte Ltd.
Proceedings commenced by BNP Paribas against both defendants.
Writ served on Polynesia Timber Services Pte Ltd.
Order of court obtained for service outside jurisdiction on the second defendant.
Judgment in default of appearance obtained against Polynesia Timber Services Pte Ltd.
Request made to the Registrar of the High Court at Kuala Lumpur for service on the second defendant.
Second defendant requested BNP Paribas to fix an appointment through his secretary to effect service on him at his residence.
First attempt to serve the second defendant at his residence by the process server.
Second attempt to serve the second defendant at his residence by the process server.
Third attempt to serve the second defendant at his residence by the process server.
Plaintiffs' solicitors wrote to the Registrar stating that the second defendant may be located at the office of a Malaysian company.
Plaintiffs' solicitors received a reply from the process server advising that his service attempts on the second defendant were unsuccessful.
Danny Chia spoke with the second defendant on the telephone.
Plaintiffs applied for substituted service.
Plaintiffs' application for substituted service was granted.
Notice of the writ of summons was advertised in two Malaysian newspapers.
Second defendant objected to the mode of service.
Plaintiffs' solicitors forwarded copies of the affidavit, application and order of court for substituted service as well as his personal guarantee to the second defendant's Kuala Lumpur residence.
Second defendant was notified about the documents which had been forwarded to him, by a fax from the plaintiffs' solicitors.
Plaintiffs entered judgment in default of appearance against the second defendant.
Second defendant applied to set aside the substituted service as well as the default judgment.
Deputy Registrar granted the second defendant's application.
Appeal heard before Lai Siu Chiu J.
Parties appeared before Lai Siu Chiu J to clarify the orders made earlier.
Appeal allowed.
Second defendant’s appeal vide CA 600150 of 2001 was dismissed.

7. Legal Issues

  1. Validity of Substituted Service
    • Outcome: The court held that incomplete compliance with the Practice Direction amounted to an irregularity but did not warrant setting aside the service of the writ.
    • Category: Procedural
    • Sub-Issues:
      • Non-compliance with Practice Direction
      • Failure to disclose material facts
  2. Service out of Jurisdiction
    • Outcome: The court determined that service through Malaysian judicial authorities was required for writs issued in Singapore.
    • Category: Jurisdictional

8. Remedies Sought

  1. Monetary Damages
  2. Judgment for Debt

9. Cause of Actions

  • Breach of Guarantee
  • Debt Recovery

10. Practice Areas

  • Litigation
  • Banking Law

11. Industries

  • Banking
  • Timber

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Yeo Yoo Teik v Jemaah Pengadilan Sewa, Pulau Pinang & AnorHigh CourtYes[1996] 2 MLJ 54MalaysiaCited regarding practice directions but found not directly relevant to the Practice Direction in question.
Raja Guppal a/l Ramasamy v Sagaran a/l PakiamHigh CourtYes[1999] 2 MLJ 677MalaysiaCited regarding practice directions but found not directly relevant to the Practice Direction in question.
Capital Insurance Bhd v Kasim bin Mohd AliHigh CourtYes[2000] 1 MLJ 193MalaysiaCited regarding practice directions but found not directly relevant to the Practice Direction in question.
Re S Nirmala a/p Muthiah Selvarajah t/a Shamin Properties; ex-parte The New Straits Times PressHigh CourtYes[1988] 2 MLJ 616MalaysiaCited for the principle that the Practice Direction had no application when the whereabouts of the person to be served were unknown.
Lee Tain Tshung v Hong Leong Finance BhdCourt of AppealYes[2000] 3 MLJ 364MalaysiaCited for the proposition that practice directions/notes do not have the force of law and are intended to do no more than directions for administrative purposes.
Ooi Bee Tat v Tan Ah Chim & Sons Sdn BhdHigh CourtYes[1995] 3 MLJ 465MalaysiaCited for the proposition that practice directions/notes do not have the force of law and are intended to do no more than directions for administrative purposes.
Karen Ahmad Aliyuddin v Standard Chartered BankHigh CourtYesMallal's Digest vol 2(2) 4 ed (1998 reissue) para 4141MalaysiaCited for the holding that it was not necessary in all cases for the Practice Direction to be complied with.
Malayan United Finance Bhd v Sun Chong Construction Sdn BhdHigh CourtYes[1995] 4 MLJ 741MalaysiaCited for the holding that non-compliance with para 5 of the Practice Direction was at most an irregularity which did not nullify proceedings.
Re Yeap Chee Fun: ex-parte Pernas Trading Sdn BhdHigh CourtYes[2000] 5 MLJ 510MalaysiaCited for the holding that there was no serious non-compliance with the substantive requirements of the Practice Direction when an order for substituted service of a bankruptcy notice was granted.
United Overseas Bank Ltd v Wong Hai OngHigh CourtYes[1999] 1 MLJ 474MalaysiaCited as the direct result of the ruling that service through Malaysian judicial authorities, of writs issued in Singapore, came about.
Sunkyong International Inc v Malaysian Rubber Development Corporation BhdCourt of AppealYes[1992] 2 MLJ 146MalaysiaCited for the principle that service of a Malaysian legal process in a foreign country through a private agent was not valid.
Koh Thong Kuang v United Malayan Banking Corporation BhdCourt of AppealYes[1994] 3 MLJ 509MalaysiaCited for the principle that the Practice Direction should not be applied blindly but mutatis mutandis the facts of each situation.

13. Applicable Rules

Rule Name
Practice Note No. 1 of 1968 of the Malaysian High Court

14. Applicable Statutes

Statute NameJurisdiction
Rules of Court 1997 O 11 rr 3(3)Singapore
Rules of Court 1997 O 11 r 4Singapore
Rules of Court 1997 O 2 rr 1(1)Singapore
Rules of Court 1997 O 2 rr 1(3)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Substituted Service
  • Service out of Jurisdiction
  • Practice Direction
  • Default Judgment
  • Guarantor
  • Writ of Summons
  • Civil Procedure Convention

15.2 Keywords

  • Substituted Service
  • Service out of Jurisdiction
  • Practice Direction
  • Default Judgment
  • Singapore High Court
  • Malaysian High Court
  • Cross-Border Litigation

17. Areas of Law

Area NameRelevance Score
Civil Practice75
Jurisdiction60
Summary Judgement30
Asset Recovery25
Contract Law20

16. Subjects

  • Civil Procedure
  • Conflict of Laws
  • Banking
  • Debt Recovery