Yusoff Shah v Taufiq Abdul Halim: Setting Aside Default Judgment for Debt Acknowledgment

In the General Division of the High Court of Singapore, Muhammad Yusoff Shah bin Khmamarudin sued Muhammad Taufiq Abdul Halim for breach of a Deed of Acknowledgement of Debt. The Defendant applied to set aside a default judgment entered against him. The court, presided over by Assistant Registrar Kenneth Choo, dismissed the application, finding the default judgment regular and that the Defendant had not raised a prima facie defense or triable issue. The court found the Defendant liable for the debt.

1. Case Overview

1.1 Court

General Division of the High Court

1.2 Outcome

Application dismissed.

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Application to set aside a default judgment. The court dismissed the application, finding the judgment regular and no meritorious defense.

1.7 Decision Date

25 April 2021

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Muhammad Yusoff Shah bin Khmamarudin	Plaintiff, Defendant in counterclaim	Individual	Application dismissed	Lost	Azri Imran Tan of I.R.B Law LLP Joshua Chow Shao Wei of I.R.B Law LLP
Muhammad Taufiq Abdul Halim	Defendant, Plaintiff in counterclaim	Individual	Application dismissed	Lost	Joseph Ignatius of Ignatius J & Associates

3. Judges

Judge Name	Title	Delivered Judgment
Kenneth Choo	Assistant Registrar	Yes

4. Counsels

Counsel Name	Organization
Azri Imran Tan	I.R.B Law LLP
Joshua Chow Shao Wei	I.R.B Law LLP
Joseph Ignatius	Ignatius J & Associates

4. Facts

The Plaintiff entered into four capital funding agreements with 360 Brothers Pte Ltd.
The Defendant is a director and shareholder of 360 Brothers Pte Ltd.
The Company experienced cash flow issues in February 2020.
The Defendant signed a Deed of Acknowledgement of Debt on 3 July 2020, acknowledging a debt of SGD 1,425,000 to the Plaintiff.
The Defendant failed to repay the debt by 15 August 2020.
The Plaintiff commenced an action against the Defendant for breach of the Deed.
The Defendant filed a Defence and Counterclaim out of time.
A Default Judgment was entered against the Defendant.

5. Formal Citations

Muhammad Yusoff Shah bin Khmamarudin v Muhammad Taufiq Abdul Halim, Suit No 751 of 2020 (Summons No 5367 of 2020), [2021] SGHCR 3

6. Timeline

Date	Event
2019-11-25	Agreement number 360BPL018 dated
2019-11-30	Agreement number 360BPL019 dated
2019-12-21	Agreement number 360BPL020 dated
2019-12-27	Agreement number 360BPL021 dated
2020-01-20	Company made certain payments to Plaintiff
2020-06-10	Company made certain payments to Plaintiff
2020-07-03	Defendant signed Deed of Acknowledgement of Debt
2020-08-12	Plaintiff's solicitors issued letter of demand
2020-08-15	Deadline for Defendant to repay debt
2020-08-17	Plaintiff commenced action against Defendant
2020-08-24	Defendant's solicitors filed Memorandum of Appearance
2020-09-07	Deadline for Defendant to file and serve defence
2020-09-09	Plaintiff's solicitors gave written notice of intention to enter default judgment
2020-09-11	Defendant filed Defence and Counterclaim
2020-09-11	Default Judgment entered against Defendant
2020-09-14	Defendant's solicitors wrote to Plaintiff's solicitors regarding default judgment
2020-09-15	Plaintiff's solicitors replied to Defendant's solicitors
2020-09-16	Plaintiff's solicitors requested payment or confirmation of application to set aside judgment
2020-09-22	Defendant's solicitors confirmed application to set aside judgment
2020-10-08	Plaintiff applied to garnish Defendant's bank account
2020-10-23	Final garnishee order made in favor of Plaintiff
2020-11-04	Plaintiff applied for examination of judgment debtor order
2020-11-04	Court granted examination of judgment debtor order
2020-11-09	Plaintiff's solicitors informed Defendant's solicitors of examination of judgment debtor order
2020-11-21	Personal service of examination of judgment debtor order effected on Defendant
2020-12-08	Defendant filed Setting-aside Application
2021-03-09	Hearing of Setting-aside Application
2021-04-26	Judgment reserved

7. Legal Issues

Setting Aside Default Judgment
- Outcome: The court held that the default judgment was regular and declined to set it aside.
- Category: Procedural
- Related Cases:
  - [2008] 4 SLR(R) 907
Breach of Contract
- Outcome: The court found the Defendant liable for breach of the Deed of Acknowledgement of Debt.
- Category: Substantive
Non est factum
- Outcome: The court rejected the Defendant's defense of non est factum.
- Category: Substantive
- Related Cases:
  - [2015] 5 SLR 62
Consideration
- Outcome: The court held that consideration was not required for the validity of the Deed.
- Category: Substantive

8. Remedies Sought

Monetary Damages
Declaration that the Defendant is not indebted to the Plaintiff
Declaration that the Deed is invalid and should be set aside

9. Cause of Actions

Breach of Contract

10. Practice Areas

Commercial Litigation

11. Industries

No industries specified

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(R) 907	Singapore	Cited for the legal principles relating to the setting aside of default judgments, distinguishing between regular and irregular judgments.
Evans v Bartlam	N/A	Yes	[1937] AC 473	N/A	Cited for the test to assess whether a regular default judgment should be set aside, i.e., whether the defendant could establish a prima facie defense.
Faircharm Investments Ltd v Citibank International plc	England and Wales Court of Appeal (Civil Division)	Yes	[1998] EWCA Civ 171	England and Wales	Cited for the principle that the court should uphold the default judgment if the defendant is 'bound to lose' if the judgment is set aside and the matter re-litigated.
Gill v. Woodfin	N/A	Yes	(1884) 25 Ch.D. 707	N/A	Cited for the principle that if a defence is served before judgment is entered, even if out of time, judgment in default cannot be entered.
Gibbings v. Strong	N/A	Yes	(1884) 26 Ch.D. 66	N/A	Cited for the principle that if a defence has been put in, though irregularly, the court will not disregard it, but will look at the merits of defence.
M.J.H. Sdn. Bhd. v. Jurong Granite Industries Sdn. Bhd.	N/A	Yes	[1991] 3 C.L.J. 2885	N/A	Cited for the principle that if a defence is served before judgment is entered, even if out of time, judgment in default cannot be entered.
Lady Elizabeth Anson (t/a Party Planners) v. Trump	N/A	Yes	[1998] 3 All E.R. 331	N/A	Cited for the principle that a judgment in default entered after service of an out-of-time defence is regular, although liable to be set aside by the court as a matter of discretion.
Real Marble Works Sdn. Bhd. v. Teh Khoon Chuan Trading Sdn. Bhd. & Ors.	N/A	Yes	[1999] 6 M.L.J. 140	N/A	Cited for the principle that the rule against entering default judgment after an out-of-time defence is not mandatory and leaves the court with discretion.
Idris bin Haji Salleh v. Federal Auto Holdings Bhd.	N/A	Yes	[1979] 2 M.L.J. 141	N/A	Cited for the principle that the court will have regard to the content of the defence delivered out of time and deal with the case in such a manner that justice can be done.
Arab-Malaysia Finance Bhd. v. Malacca Development Corp Sdn. Bhd. & Ors.	N/A	Yes	[1997] 5 M.L.J. 685	N/A	Cited for the principle that the court will have regard to the content of the defence delivered out of time and deal with the case in such a manner that justice can be done.
Metrojaya Bhd. & Anor. v. B.T.C. Clothier Sdn. Bhd. & Anor.	N/A	Yes	[1996] 5 M.L.J. 45	N/A	Cited for the principle that a defence delivered out of time must nevertheless be considered and that courts prefer cases to be decided on merits.
MacDonald and another v D & F Contracts Ltd	English High Court	Yes	[2018] 1 WLR 5695	England and Wales	Cited for the principle that if a defence is filed out of time, an application for an extension of time must be made for there to be a valid defence.
Panwell Investments Pte Ltd v Lau Ee Theow	N/A	Yes	[1996] 3 SLR(R) 73	Singapore	Cited for the principle that if leave was not obtained to file the defence out of time, the plaintiff was entitled to proceed as if no defence had been filed at all.
Oversea-Chinese Banking Corp Ltd v Yeo Hui Keng (Tan Peng Chin LLC, third party)	High Court	Yes	[2019] 5 SLR 172	Singapore	Cited for the principle that the defence of non est factum should only be allowed in exceptional situations to rectify injustice and unfairness.
Mahidon Nichiar bte Mohd Ali and others v Dawood Sultan Kamaldin	Court of Appeal	Yes	[2015] 5 SLR 62	Singapore	Cited for the requirements for the application of the doctrine of non est factum.
Oversea-Chinese Banking Corp Ltd v Frankel Motor Pte Ltd and others	High Court	Yes	[2009] 3 SLR(R) 623	Singapore	Cited for rejecting a plea of non est factum due to the appellant's negligence and carelessness.
Lim Zhipeng v Seow Suat Thin and another matter	N/A	Yes	[2020] 2 SLR 1151	Singapore	Cited for the principle that consideration is not required for the validity of a deed.
First Property Holdings Pte Ltd v U Myo Nyunt @ Michael Nyunt	High Court	Yes	[2020] SGHC 276	Singapore	Cited for the principle that a defendant’s delay in applying to set aside a default judgment will be viewed differently depending on whether the default judgment is entered without a trial.
Su Sh-Hsyu v Wee Yue Chew	N/A	Yes	[2007] 3 SLR(R) 673	Singapore	Cited for the principle that the question of whether there is a defence on the merits is the dominant feature to be weighed against the applicant’s explanation for the default and any delay as well as against prejudice to the other party.
Karats Pte Ltd v Asia Capital and Brokerage Pte Ltd	Singapore Magistrate Court	Yes	[2019] SGMC 20	Singapore	Cited to state that it is not for this court to decide if r 28(1) of the PCR was breached in the present case as that is ordinarily a matter for another forum

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
Rules of Court (Cap 322, R 5, 2014 Rev Ed)	Singapore
O 18 r 2 of the Rules of Court (Cap 322, R 5, 2014 Rev Ed)	Singapore
O 19 r 2 of the Rules of Court (Cap 322, R 5, 2014 Rev Ed)	Singapore
Legal Profession (Professional Conduct) Rules 2015 (Cap 161, S 706/2015)	Singapore
r 28 of the Legal Profession (Professional Conduct) Rules 2015 (Cap 161, S 706/2015)	Singapore
O 19 r 8A of the Rules of Court	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Deed of Acknowledgement of Debt
Default Judgment
Non est factum
Consideration
Funding Agreements
Setting-aside Application

15.2 Keywords

default judgment
setting aside
deed of acknowledgement
breach of contract
non est factum
consideration

17. Areas of Law

Area Name	Relevance Score
Judgments and Orders	90
Non est factum	80
Civil Procedure	75
Contract Law	70
Mistake	60

16. Subjects

Civil Procedure
Contract Law