Judgment

[Please note that this case has not been edited in accordance with the current Singapore Law Reports house style.]

Karthigesu J (delivering the grounds of judgment of the court):

1           The appellants appealed against an order of the High Court refusing to set aside the registration of a judgment of the High Court of Malaya at Kuala Lumpur in Civil Suit No C23–1760–86 dated 13 April 1988, (‘the judgment’) registered under the provisions of the Reciprocal Enforcement of Commonwealth Judgments Act (Cap 264) (‘the Act’). We dismissed the appeal, with costs, on 27 May 1992. We now give our reasons.

2           The appellants by a ‘letter of guarantee’ in writing dated 24 May 1984, jointly and severally guaranteed the repayment of a loan which the respondents (‘MBf’), at the appellants’ request, had agreed to grant to Sun Hun Perumahan Sdn Bhd (‘Sun Hun’). The relevant provisions of the letter of guarantee were the following:

Section 2.01

In consideration of the lender’s (MBf) promise to grant the loan to the borrower (Sun Hun) at our request and upon such terms as the lender deems fit, we hereby jointly and severally guarantee repayment to the lender all sums of money together with interest costs charges and all other sums payable by the borrower in the event of the borrower’s default in paying interest due under the loan or in the repayment of the loan or any part thereof or the breach of any terms governing the loan by the borrower. Our liability herein is co-extensive with that of the borrower.

Section 2.02

If and whenever the borrower shall make default in the payment of any moneys due and payable hereunder we shall on demand by the lender pay to the lender all moneys in regard to which such default has been made by the borrower and any amount payable by the borrower arising from such default.

Section 2.03

This guarantee is in addition to and not in substitution for any other rights which the lender may have against the borrower or any third party and may be enforced without first having recourse to any such rights and without taking any step or proceedings against the borrower or any other guarantor or indemnifier.

Section 3.01

We hereby declare that our obligations herein shall not be discharged except by performance and then only to the extent of such performance. Such obligations shall not be subject to any prior notice to us with regard to any default of the borrower and shall not be impaired by any extension of time forebearance or concession given to the borrower and/or to us or any assertion of or failure to assert any right or remedy against the borrower and/or us or in respect of any security created by or in pursuance of the terms of the loan and/or any modification or amplification of the provisions thereof contemplated by the terms thereof or any failure of the borrower to comply with any requirements or any law regulations or order in Malaysia or of any political subdivision or agency thereof.

Section 7.01

If the borrower shall in any respect fail to perform any of its obligations governing the loan or commits any breach of its obligations pertaining thereto then we shall, in addition to our liability herein, jointly and severally as a separate covenant indemnify the lender and its respective assigns representatives and successors-in-title against all losses damages costs expenses or otherwise which may be incurred by the lender by reason of any default on the part of the borrower in performing and observing the agreements conditions covenants and undertakings on its part to be observed and performed.

Section 7.03

It is hereby agreed that any admission or acknowledgement in writing by the borrower or by any person authorized on behalf of the borrower or a judgment (by default or otherwise obtained against the borrower) or a statement of account in writing showing the indebtedness of the borrower in relation to the subject matter of this guarantee which is duly certified by an authorized officer of the lender shall be binding and conclusive evidence against us and our respective heirs, executors representatives and successors-in-title as the case may be for whatever purpose including as being conclusive evidence of indebtedness in a court of law.

3           It will be seen from these provisions of the letter of guarantee that the appellants’ liability thereunder was strict and comprehensive.

4           The loan to Sun Hun by MBf was evidenced by an agreement in writing dated 29 May 1984. It was a detailed document providing for a loan in the maximum principal amount of ringgit one million seven hundred and fifty thousand (M$1.75m) (s 1.02); that the expressions ‘the guarantee’ and ‘the guarantors’ used in the agreement referred indisputably to the letter of guarantee given by the appellants on 24 May 1984 (s 2.01(i) and (j)); for the charging of interest on the principal sum at the rate of 15.5% pa or such other rate at the total discretion of MBf with monthly rests and for its payment on a monthly basis (ss 7.01 and 7.03); for the repayment of the principal sum by the stated three quarterly instalments (s 8.01); for the provision of security (s 9.01); the events of default (s 12.0); for the sale of the properties given by way of security in the event of default and the application of the proceeds of sale (ss 12.02 and 12.03); and for late payment interest (s 12.04) amongst several other detailed provisions which are not relevant for present purposes.

5           MBf commenced proceedings against the appellants in the High Court of Malaya at Kuala Lumpur in Civil Suit No C23–1760–86 on 19 June 1986, claiming that Sun Hun had defaulted in the repayment of the loan and the payment of interest. Accordingly, under the provisions of the letter of guarantee, they claimed a sum of M$2,038,068.16 as at 31 January 1986 made up as to principal of M$1.75m, as to interest of M$260,895.37 and as to penalty interest of M$27,172.79.

6           Both appellants entered appearance and contested MBf’s application for summary judgment under the O 14 procedure, a procedure not unlike our own O 14 procedure. The appellants were legally represented at the hearing and relied on an affidavit filed by the second appellant on his own behalf and on behalf of the first appellant. The reasons bespoken in the second appellant’s affidavit opposing summary judgment were that MBF failed to render them any statement to prove the alleged indebtedness, that the rate of interest charged at 19% pa was a penalty and in breach of the Contracts Act 1950 and that MBf failed to realize the securities provided by Sun Hun, thus ‘placing all the burdens of any alleged indebtedness on the defendants (appellants)’. However, summary judgment was entered for MBf on 13 April 1988. The judgment translated from the Malay language read as follows:

The first and second defendants having entered appearance herein and the court having ordered that judgment is (sic) hereinafter provided be entered against the first and second defendants it is this day adjudged that the first and second defendants do pay the plaintiffs the sum of M$1,750,000 and interest (sic) plus M$260,895.37 with interest at 15% pa from 1 February 1986 until the date of full payment and costs of $250.

Dated 13 April 1988.

7           MBf failed to get judgment for the penalty interest they had claimed in the sum of M$27,172.79. They were awarded interest at 15% pa although they had claimed 19% pa.

8           The appellants had filed a notice of appeal against the judgment and had also applied for a stay of execution of the judgment, but when the appeal came on for hearing on 26 June 1988, the appeal was withdrawn by the appellants’ counsel and the application for a stay of execution of the judgment was not proceeded with by the appellants’ counsel and, at his request, was struck off the list. What is stated in this paragraph was not disputed by the appellants’ counsel before us, although he drew our attention to the appellants’ assertion made on affidavit that their Malaysian solicitors had acted without their instructions and accordingly they had not had a fair trial of the issues in the Malaysian courts. Nothing, however, was done to remedy this position and the judgment had remained unsatisfied.

9           This then was the factual position when MBf applied for the judgment to be registered under the provisions of the Act on 1 August 1989, although it should be mentioned that MBf had, on 5 November 1988, commenced proceedings in the High Court of Malaya at Kuala Lumpur against Sun Hun for the identical sum they had claimed against the appellants and for which they had already obtained a judgment against the appellants, less the claim for penalty interest and interest at a lower rate than claimed. Sun Hun, on the other hand, also commenced proceedings in Malaysia on 23 November 1989 against MBf, claiming certain declarations and reliefs for alleged breaches of the loan agreement. We have not been advised of the progress of these two proceedings. Not that it matters.

10       On 29 November 1989 the senior assistant registrar made an order that the judgment be registered in the High Court of Singapore pursuant to the provisions of the Act. He also made an order that the appellants be at liberty to apply to set aside the registration of the judgment.

11       It would be pertinent to note that in the affidavit filed in Singapore in support of the application to register the judgment under the Act by MBf’s Singapore solicitor, she affirmed the following:

To the best of my knowledge and belief, the judgment creditors (MBf) were delayed in their enforcement of the said judgment as there were many meetings between the judgment creditors and the judgment debtors (the appellants) held subsequent to the granting of the judgment in order to try and settle this matter in Malaysia. This matter could not be so resolved and the plaintiffs (MBf) must now apply to register the Malaysian judgment in Singapore in order that they may proceed to enforce it.

12       This assertion made on behalf of MBf was not and never has been challenged by the appellants. Instead, the grounds relied on by the appellants to set aside the registration of the judgment as deposed by the second appellant on his behalf as well as on behalf of the first appellant were that MBf had commenced a separate action against Sun Hun, the principal debtor, for the identical sum claimed against them (referred to above) in which Sun Hun had filed a defence and were strenuously resisting the claim and further that Sun Hun had also commenced proceedings against MBf claiming certain declarations and reliefs for alleged breaches of the loan agreement (also referred to above) in connection with which Sun Hun had filed an application for an interim interlocutory injunction to restrain MBf ‘from taking legal proceedings against any securities given by third parties’.

13       As mentioned earlier, we have not been advised of the progress of these proceedings and, in particular, whether the interim interlocutory injunction was obtained or not. However that might be, these were the grounds relied on for seeking to set aside the registration of the judgment and it was said that ‘it would be unjust and inequitable to permit the judgment creditors (MBf) to proceed with the enforcement of their judgment …’.

14       The appellants did not succeed in setting aside the registration of the judgment. Their appeal was heard by Chao Hick Tin J, before whom they raised a further argument for the first time that the judgment was vague and ambiguous and that it would not be just or convenient that the judgment should be registered in Singapore. They conceded that they were not relying on any of the grounds set out in s 3(2) of the Act. Chao Hick Tin J dismissed the appeal [see [1991] 2 MLJ 320].

15       Before us the appellants took the same position they had taken before Chao Hick Tin J. They argued that it was a fundamental principle of law that the liability of a guarantor was secondary and arose only when there had been a default by the borrower under his agreement with the lender. Since the borrower, Sun Hun, was contesting liability in the action brought against them by MBf, and since Sun Hun had themselves commenced action seeking certain declarations and remedies against MBf for breaches under the loan agreement, the judgment ought not to be registered in Singapore to enable it to be enforced until these two actions had been finally determined by the Malaysian courts. If it were permitted, it would not be ‘just and convenient’ in the words of s 3(1) of the Act or it would not be ‘just and convenient’ in the words of O 67 r 9(3) of the Rules of the Supreme Court 1970 (‘the RSC’). The Singapore courts had a discretion and that discretion ought to be exercised in the appellants’ favour.

16       The Act applies to judgments of the superior courts of Malaysia. It is not doubted that the judgment is a judgment of a superior court of Malaysia. Thus, the relevant portion of s 3(1) of the Act (as extended by Ministerial notification under s 5) reads:

Where a judgment has been obtained in a superior court of (Malaysia) … the judgment creditor may apply to the High Court … to have the judgment registered in the Court, and on any such application the High Court may, if in all the circumstances of the case it thinks it is just and convenient that the judgment should be enforced in Singapore, and subject to this section, order the judgment to be registered accordingly. (Emphasis added.)

17       Order 67 r 9(3) of the RSC (as it then was) reads:

Where the Court hearing an application to set aside the registration of a judgment registered under the Ordinance (the Act) is satisfied that the judgment falls within any of the cases in which a judgment may not be ordered to be registered under section 3(2) of that Ordinance or that it is not just or convenient that the judgment should be enforced in Singapore or that there is some other sufficient reason for setting aside the registration, it may order the registration of the judgment to be set aside on such terms as it thinks fit. (Emphasis added.)

18       Clearly, the court has a discretion not to register the judgment or, having registered it, to set aside the registration on the application of the judgment debtor on the ‘just and convenient’ ground or for ‘some other sufficient reason’.

19       The appellants’ argument above premised was specious. The terms of the letter of guarantee expressly provided that there was no necessity for MBf to take any steps or proceeding against Sun Hun before enforcing the guarantee against the appellants (s 2.03). The letter of guarantee further provided that a statement of account in writing would be binding and conclusive evidence against the appellants (s 7.03) and that the appellants would, on demand by MBf, pay all moneys in regard to which Sun Hun had defaulted (s 2.02). The question of whether or not Sun Hun had made any default in the payment of the moneys due and payable to MBf under the loan agreement was a matter for the High Court in Kuala Lumpur and not for this court on an application to set aside the registration of the judgment. It would not be just and/or convenient for the Singapore courts to sit on appeal against the judgment pronounced by the High Court in Kuala Lumpur which was the court competent to exercise jurisdiction over the parties. For the same reason, it would not be just and/or convenient for the Singapore courts to say whether execution of the judgment should be stayed pending the trial of the two Malaysian suits previously mentioned. It cannot be emphasized too strongly that the appellants had preserved their rights to challenge the judgment and to obtain a stay but chose not to pursue them before the Malaysian courts. Their reasons for not doing so is the often heard grouse of some clients that they were let down by their lawyers. This cannot be taken seriously.

20       The principle of enforcing foreign judgments is encapsulated in the passage from Cheshire & North’s Private International Law (11th Ed) at p 361 quoted by Chao Hick Tin J in his judgment, and which we agree should apply in Singapore with equal force. It reads:

It is well established that in an action on a foreign judgment the English court is not entitled to investigate the propriety of the proceedings in the foreign court. Erroneous judgments delivered by a foreign court are not void in England. The merits of the case have been argued and determined, and if one of the parties is discontented with the decision his proper course is to take appellate proceedings in the forum of the judgment. The English tribunal, in other words, cannot sit as a Court of Appeal against a judgment pronounced by a court which was competent to exercise jurisdiction over the parties.

21       We now turn to consider the argument that the judgment was vague and ambiguous. It was argued that it was not clear from the wording of the judgment, which it will be remembered was translated from the Malay language to the English, how the interest was to be calculated. Thus, the registration of the judgment should be set aside on the ‘just and convenient’ grounds or, alternatively, on the third limb of O 67 r 9(3), that is to say, ‘that there is some other sufficient reason for setting aside the registration’.

22       Appellants’ counsel relied on Re Lim Kim Guan, ex p Four Seas Communications Bank Ltd in support of his proposition that since the amount of interest for which judgment was given was not quantified in the judgment or that it could not be ascertained with any degree of certainty, the judgment was bad. This, it was argued, was ‘some other sufficient reason’ for setting aside the registration.

23       On the face of the judgment, that is, in the form it is before the court, an ambiguity as to the amount of interest for which judgment was given is certainly apparent. It firstly states that interest was awarded on the judgment sum of M$1.75m. The words of the judgment are ‘do pay the plaintiffs the sum of M$1.75m and interest’. The rate of interest and the period for which the interest is to be calculated is not stated in this context. The judgment then continues as follows: ‘plus M$260,895.37 with interest at 15% pa from 1 February 1986 until the date of full payment’, that is to say, judgment on a further sum of M$260,895.37 and interest on that sum at 15% pa from 1 February 1986 to the date full payment is made.

24       The ambiguity is whether the interest awarded on the judgment sum of M$1.75m is at a different rate of interest and for a different period, or whether it is to be at the same rate of interest and for the same period for which the interest on the judgment sum of M$260,895.37 was awarded.

25       In our view, it would be wrong for the ‘registering court’ to attempt to interpret the judgment or to attempt to reconcile the ambiguity even if that were possible. It should be noted that the sum of M$260,895.37 was claimed not as the principal sum or forming part of the principal sum but as interest which had been quantified as at 31 January 1986. A question certainly arises whether the High Court at Kuala Lumpur intended to award interest upon interest.

26       However, there is no ambiguity or vagueness in the judgment as to the specified sums for which judgment was given. There is absolute certainty that judgment was given for M$1.75m plus M$260,895.37 and costs of $250.

27       The question therefore arises whether the uncertainty in the judgment for the amount or amounts of interest for which judgment was given would render the judgment non-registrable under the Act, or it having been registered, the registration ought to be set aside on the ‘just and convenient’ ground or, alternatively, on the third limb of O 67 r 9(3), namely, ‘that there is some other sufficient reason’.

28       Registration of a Commonwealth judgment under the Act is for the purposes of execution. This is made clear by s 3(3)(B) of the Act which reads as follows:

Where a judgment is registered under this section — the registering court shall have the same control and jurisdiction over the judgment as it has over similar judgments given by itself, but in so far only as relates to execution under this section. (Emphasis added.)

29       Bearing this in mind, and being of the view that the judgment was severable in the sense that the certain parts of the judgment could be clearly identified and separated from the uncertain parts, we came to the conclusion that there was no reason, and that justice required it, that the judgment should not be set aside thus enabling MBf to enforce so much of the judgment which could not disputed or impugned before the Singapore courts.

30       The case of Re Lim Kim Guan, ex p Four Seas Communications Bank Ltd relied on by the appellants’ counsel relates specifically to bankruptcy notices where different considerations apply. We agree with Chao Hick Tin J that this case has no relevance to the issues of registering a Commonwealth judgment under the Act or for setting aside such registration.

31       The words ‘just and convenient’ in s 3(1) of the Act and ‘just and convenient’ in O 67 r 9(3) cannot, in our view, give an untrammelled discretion to the courts. The effect of both sets of words is, in our view, the same and their effect as described by Fletcher Moulton LJ in Edwards & Co v Picard at p 907 is, ‘where it is practicable and the interests of justice require it’. We would adopt it.

32       We did not see anything impracticable or inimical to the interests of justice in permitting the registration of the judgment to stand and accordingly, we dismissed this appeal with costs.

Appeal dismissed

Reported by Mavis Chionh