OCBC v Frankel Motor: Setting Aside Default Judgment & Non Est Factum Defense
In Oversea-Chinese Banking Corp Ltd v Frankel Motor Pte Ltd, the High Court of Singapore heard an appeal by Ho Yik Fuh, the second defendant, against the decision to dismiss his application to set aside a default judgment. Oversea-Chinese Banking Corporation Limited had sued Frankel Motor Pte Ltd, along with its directors, including Ho Yik Fuh, who had guaranteed the company's banking facilities. Ho Yik Fuh argued that he was not properly served and raised a defense of non est factum, claiming he did not remember signing the guarantee. The court dismissed the appeal, finding that service was properly effected and that Ho Yik Fuh had not established a valid defense on the merits.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Appeal dismissed with costs.
1.3 Case Type
Civil
1.4 Judgment Type
Judgment Reserved
1.5 Jurisdiction
Singapore
1.6 Description
OCBC sued Frankel Motor and its directors, including Ho Yik Fuh, who sought to set aside a default judgment based on improper service and non est factum.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Ho Yik Fuh | Appellant, Defendant | Individual | Appeal dismissed | Lost | |
| Oversea-Chinese Banking Corp Ltd | Plaintiff | Corporation | Appeal dismissed | Lost | |
| Frankel Motor Pte Ltd | Defendant | Corporation | Judgment in default of appearance | Lost | |
| Teo Kok Ping Jemme | Defendant | Individual | Judgment in default of appearance | Lost | |
| Teo Kian Pheng Alvin | Defendant | Individual | Judgment in default of appearance | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Kan Ting Chiu | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| G Mohan Singh | G. Mohan Singh |
| Loke Pei-Shan | Rajah & Tann LLP |
4. Facts
- Plaintiff sued Frankel Motor and its directors, including the appellant, who guaranteed the company's banking facilities.
- Plaintiff obtained an order for substituted service of the writ on the appellant at his last known address.
- Appellant claimed he was not residing at the address where substituted service was effected.
- Appellant claimed he did not remember signing the guarantee due to a lack of explanation from the bank officer.
- The guarantee document had the words 'personal guarantee' printed in large capital letters.
- The plaintiff’s offer of facilities was conditional to the appellant issuing his personal guarantee.
- The appellant had signed Frankel Motor’s acceptance of the offer as well as Frankel Motor’s directors’ resolution to accept the plaintiff’s offer.
5. Formal Citations
- Oversea-Chinese Banking Corp Ltd v Frankel Motor Pte Ltd and Others, Suit 775/2007, RA 300/2008, [2009] SGHC 76
6. Timeline
| Date | Event |
|---|---|
| Plaintiff issued letter of offer to Frankel Motor. | |
| Appellant executed the guarantee. | |
| Attempted service of writ on the defendant. | |
| Attempted service of writ on the defendant. | |
| Affidavit by the plaintiff’s solicitors’ clerk was filed. | |
| Court ordered substituted service of the writ. | |
| Service effected under the order of court. | |
| Default judgment was entered. | |
| Appellant discovered Originating Summons (Creditor’s Bankruptcy Application). | |
| Judgment Reserved. |
7. Legal Issues
- Setting aside default judgment
- Outcome: The court held that the appellant failed to show that the order for substituted service was improperly obtained or that the default judgment was entered improperly, and thus the test for setting aside regular judgments applied.
- Category: Procedural
- Sub-Issues:
- Improper service of writ
- Failure to establish a prima facie defense
- Related Cases:
- [2008] 4 SLR 907
- Non est factum
- Outcome: The court held that the appellant did not make a fundamental mistake on the character and effect of the guarantee he signed, and his negligence and carelessness disentitled him from pleading non est factum.
- Category: Substantive
- Sub-Issues:
- Fundamental mistake as to the character or effect of the document
- Negligence or carelessness in signing the document
8. Remedies Sought
- Monetary Damages
9. Cause of Actions
- Breach of Guarantee
10. Practice Areas
- Commercial Litigation
- Banking Litigation
11. Industries
- Banking
- Finance
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Mercurine Pte Ltd v Canberra Development Pte Ltd | Court of Appeal | Yes | [2008] 4 SLR 907 | Singapore | Cited as the landmark decision that reviewed the principles applied by the courts of Singapore in dealing with applications to set aside default judgments and set out the proper bases for setting aside such judgments. |
| Watt v Barnett | N/A | Yes | (1878) 3 QBD 363 | N/A | Cited for the principle that substituted service carried out pursuant to an order of court is equivalent for all purposes to actual service. |
| Development & Commercial Bank Bhd v Aspatra Corp Sdn Bhd & Anor | Malaysian Supreme Court | Yes | [1995] 3 MLJ 472 | Malaysia | Cited for the principle that the validity of an order for substituted service may only be challenged by proceedings instituted for that purpose, and not collaterally in related proceedings. |
| Anlaby v Praetorius | N/A | Yes | (1888) 20 QBD 764 | N/A | Cited for the ex debito justitiae rule that a defendant is entitled to set aside an irregular default judgment as of right. |
| Evans v Bartlam | House of Lords | Yes | [1937] AC 473 | N/A | Cited for the test of whether the defendant can establish a prima facie defence in the sense of showing that there are triable or arguable issues when deciding whether to set aside a regular default judgment. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| No applicable statutes | |
15. Key Terms and Keywords
15.1 Key Terms
- Default Judgment
- Substituted Service
- Non est factum
- Personal Guarantee
- Banking Facilities
- Prima Facie Defence
15.2 Keywords
- Default Judgment
- Substituted Service
- Non est factum
- Guarantee
- Banking
- OCBC
- Frankel Motor
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Setting Aside Default Judgement | 90 |
| Guarantee | 80 |
| Civil Practice | 75 |
| Guarantor | 70 |
| Non est factum | 70 |
| Guarantees and indemnities | 70 |
| Contract Law | 60 |
| Estoppel | 40 |
16. Subjects
- Civil Procedure
- Banking
- Guarantees