GVR Global Pte Ltd v Wayne Burt Pte Ltd and another

JudgeAng Cheng Hock J
Judgment Date30 April 2020
Neutral Citation[2020] SGHC 87
Citation[2020] SGHC 87
Defendant CounselIsaac Tito Shane, Ramesh s/o Varathappan and Jaspreet Kaur Purba (Tito Isaac & Co LLP),The first defendant absent and unrepresented
Published date07 May 2020
Hearing Date20 June 2019,10 October 2019,14 August 2019,13 August 2019,26 November 2019,19 June 2019,15 August 2019,18 June 2019
Plaintiff CounselN K Rajarh, Rajaram Muralli Raja and Kyle Gabriel Peters (K&L Gates Straits Law LLC)
Docket NumberOriginating Summons No 1443 of 2018
CourtHigh Court (Singapore)
Date30 April 2020
Subject MatterInsolvency Law,Stay of winding-up order,Winding-up order,Winding up
Ang Cheng Hock J:

Originating Summons No 1443 of 2018 (the “OS”) was an application by the plaintiff for an indefinite stay of a winding-up order made by Woo Bih Lih J (“Woo J”) in CWU 252/2018 on 16 November 2018 in respect of the first defendant (“the winding-up order”). The stay was sought pursuant to s 279 of the Companies Act (Cap 50, 2006 Rev Ed) (“CA”). The plaintiff sought, in the alternative, to set aside the winding-up order in exercise of the “inherent jurisdiction” of the Court.


The first defendant, Wayne Burt Pte Ltd, is a Singapore-registered company of which the plaintiff is a controlling shareholder.1 The second defendant, M.R.K. Enterprises Pte Ltd, is the creditor which had successfully applied in CWU 252/2018 for the winding-up order. The second defendant opposed the application by the plaintiff for the winding-up order to be stayed or set aside.

The plaintiff, which holds more than 90% of the shareholding in the first defendant, did not allege that there was any defect in the winding-up order made by Woo J. The plaintiff accepted that the order was regularly obtained, and there was no allegation that the formal statutory requirements for winding-up had not been met. In particular, there was no suggestion that the statutory demand against the first defendant or the winding-up papers had not been properly served, or that the required advertisements had not been taken out.

Instead, the plaintiff’s case was that the debt claimed by the second defendant, which formed the basis of its statutory demand, was not a debt actually owed by the first defendant.2 In short, although parties did not frame it as such, the substance of the plaintiff’s complaint was that the second defendant had practised a fraud on the Court in procuring the winding-up order, in that the first defendant had been wound up on the basis of a non-existent debt.

Procedural History

A brief background to these proceedings is as follows.

On 14 September 2018, the second defendant issued a statutory demand (the “statutory demand”) to the first defendant seeking satisfaction of a loan for US$2 million (the “US$2m loan”) which had been extended to the first defendant on or about 12 June 2013. The statutory demand was served on the first defendant’s registered address at 47 Changi North Crescent, Singapore 499623, but was not responded to.3

On 23 October 2018, the second defendant applied for the first defendant to be wound up based on the said statutory demand.

On 16 November 2018, Woo J ordered that the first defendant be wound up. The judge appointed Mr Farooq Ahmad Mann as the sole liquidator of the first defendant (the “Liquidator”). The first defendant did not contest the application for winding-up.

On 23 November 2018, the plaintiff commenced these proceedings for, inter alia, a stay of the winding-up order. The plaintiff then filed an urgent application seeking an interim stay of the winding-up order. Having heard parties on 12 December 2018, I ordered an interim stay of the winding-up order pending the final disposal of this OS. I also directed that the Liquidator furnish a report on the financial standing of the first defendant one month prior to the hearing of this OS, and made clear that the directors of the first defendant were to provide such documents and information as may be required by the Liquidator for the preparation of this report.4

Issues in dispute

In these proceedings, there was no dispute that a sum of US$2m had indeed been transferred from the second defendant to the first defendant on 12 June 2013.5 Rather, the dispute centred on the nature of this transfer. The plaintiff claimed that the sum was part of the consideration paid for the purchase, by the second defendant from the first defendant, of shares in Raycom Engineering & Aerospace Pte Ltd (“Raycom”), a subsidiary of the first defendant, and hence was not a loan.6

On the other hand, the second defendant insisted that the sum of US$2m was a loan extended by the second defendant to the first defendant which has not been repaid.7 The source of the money was the GV Reddy Irrevocable Trust, which had transferred this sum of US$2m to the second defendant on 4 June 2013. This trust was a family trust of the Reddy family and had been set up by Dr Gollamudi Venka Reddy (“Dr Reddy”), a United States-based businessman.8 The second defendant then lent this sum to the first defendant. The US$2m was ultimately intended to be passed from the first defendant to Mr Mahesh Triplicani Gowri Sankar (“Mr Mahesh”), who owns and controls the plaintiff, and, through it, the first defendant.9 According to the second defendant, Mr Mahesh had asked for a loan from Dr Reddy for a business venture and had asked for the moneys to be sent to the first defendant. Dr Reddy had agreed. Dr Reddy’s evidence was that Mr Mahesh had sought the US$2m loan to finance the acquisition of a plant from the Shell Oil Company as part of a project in the petrochemicals sector.10

While the above arrangement for what was ultimately the extending of a loan from Dr Reddy to Mr Mahesh might seem unusual, the second defendant’s case was that this was an arrangement that was agreed to by the two principal individuals, ie, that the intermediaries (the first and second defendants) would be the borrower and lender.11

The Law

The plaintiff, in its OS, sought two alternative grounds of relief. The plaintiff sought a setting aside of the winding-up order pursuant to the Court’s “inherent jurisdiction”, and, in the alternative, an indefinite stay of the winding-up order under s 279 of the CA.

Setting aside the winding-up order

The plaintiff indicated in its amended OS that it was seeking to set aside the winding-up order “pursuant to the inherent jurisdiction of the Court”.12 As a preliminary point, I was of the view that the plaintiff had improperly conflated the inherent jurisdiction of the Court and the inherent powers of the Court. The inherent powers of the Court are specifically provided for in O 92 r 4 of the Rules of Court (Cap 322, R 5, 2014 Rev Ed) (“ROC”), where reference is made to “the inherent powers of the Court to make any order as may be necessary to prevent injustice or to prevent an abuse of the process of the Court”. As was noted by the Court of Appeal in Re Nalpon Zero Geraldo Mario [2013] 3 SLR 258 at [40] and [41]:

[T]he inherent jurisdiction of the court actually refers to an exercise of the inherent powers of the court … it would be preferable to refer to the exercise of [the Court’s] right to regulate matters properly before [it] as the exercise of the court’s inherent powers rather than its inherent jurisdiction.

I next turned to the issue of whether winding-up orders can in fact be set aside pursuant to the Court’s inherent powers. In this regard, there appeared to be differing views in the authorities. In Interocean Holdings Group (BVI) Ltd v Zi-Techasia (Singapore) Pte Ltd (in liquidation) [2014] 2 SLR 485 at [16], Edmund Leow JC observed that:

In Singapore, a winding-up order once perfected is one of those strange creatures that cannot be set aside or revoked. At least, there is no express provision in the [CA] permitting this.

However, in Standard Chartered Bank (Singapore) Ltd v Construction Professional Resources Pte Ltd [2019] 5 SLR 709 (“Standard Chartered”) at [10], Choo Han Teck J expressed the view, in the context of an application to set aside a winding-up order, that the inherent powers of the court under O 92 r 4 of the ROC “can be used in instances where [they] can express justice and ensure no prejudice to anyone in any way”. In that case, the inherent powers of the Court were relied on to set aside a winding-up order.

Eventually though, this point was not argued before me. In fact, the plaintiff did not even refer to the fact that it was seeking the setting aside of the winding-up order in its submissions. The question of whether the fraud on the Court (see [4] above) as alleged by the plaintiff would suffice to warrant the setting aside of the winding-up order pursuant to the Court’s inherent powers was simply not addressed. I was thus led to the inexorable conclusion that the plaintiff had, for all intents and purposes, abandoned the prayer for relief in the form of setting aside of the winding-up order. In any event, the issue of setting aside the winding-up order was rendered moot by my findings as outlined below. I therefore say no more on this particular issue.

Indefinite stay of the winding-up order

I turned then to the relief of a stay sought by the plaintiff, which was dealt with in its submissions. As the plaintiff itself recognised, an indefinite stay against the winding-up order would be premised on the application of s 279 of the CA. In particular, s 279(1) of the CA provides that: At any time after an order for winding up has been made, the Court may, on the application of the liquidator or of any creditor or contributory and on proof to the satisfaction of the Court that all proceedings in relation to the winding up ought to be stayed, make an order staying the proceedings either altogether or for a limited time on such terms and conditions as the Court thinks fit.

In Phang Choo Ong v Gilcom Investment Pte Ltd (LRG Investments Pte Ltd and another, non-parties) [2016] 3 SLR 1156 (“Phang Choo Ong”), LRG Investments Pte Ltd had applied to wind up Gilcom Investment Pte Ltd (“Gilcom”) on the basis of a default judgment obtained against it. A winding-up order was duly granted. The plaintiff there, who was the sole director and shareholder of Gilcom, sought a stay of that winding-up order pursuant to s 279(1) of the CA so that Gilcom could be allowed to apply to court to set aside the default judgment. The stay was not granted. In particular, Chua Lee Ming JC (“Chua JC”), as he then was, was not satisfied that Gilcom was in fact able to pay its debts. At...

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1 books & journal articles
  • Insolvency Law
    • Singapore
    • Singapore Academy of Law Annual Review No. 2020, December 2020
    • 1 Diciembre 2020
    ...Pte Ltd [2020] SGHC 108 at [9]. 13 [2020] 4 SLR 1294. 14 See para 18.1 above. 15 [2020] 1 SLR 1296. 16 See para 18.1 above. 17 [2021] 3 SLR 546. 18 [2014] 2 SLR 485. 19 [2019] 5 SLR 709. 20 Cap 322, R 5, 2014 Rev Ed. 21 [2016] 3 SLR 1156 at [19(a)]–[19(c)]. 22 In re Calgary and Edmonton Lan......

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