Koh Say Chong v Two Oceans Film Company Pte Ltd

JurisdictionSingapore
JudgeChoo Han Teck J
Judgment Date29 August 2016
Neutral Citation[2016] SGHC 171
CourtHigh Court (Singapore)
Docket NumberHC/Companies Winding Up No 111 of 2016
Published date31 August 2016
Year2016
Hearing Date08 July 2016,29 July 2016
Plaintiff CounselCheo Chai Beng Johnny (Cheo Yeoh & Associates LLC)
Defendant CounselDefendant unrepresented,Trish Xavier (Insolvency and Public Trustee's Office),Ron Alvin Soh and Aditya Naidu (Samuel Seow Law Corporation),Nicolas Tang (Farallon Law Corporation),Annsley Wong (Clifford Law LLP)
Subject MatterInsolvency Law,Winding Up
Citation[2016] SGHC 171
Choo Han Teck J:

The question before me is whether a creditor, who is also a controlling shareholder and director of a company may wind up the company under s 254(1)(e) and s 254(2)(a) of the Companies Act (Cap 50, 2006 Rev Ed) in the face of objection from other creditors.

Koh Say Chong (“the plaintiff”) applied to wind up Two Oceans Film Company Pte Ltd (“the Company”) on the ground of insolvency stated in s 254(1)(e) of the Companies Act. The Company is a private limited company incorporated on 28 August 1998 in Singapore that deals in the business of advertising and video production. The plaintiff is a director, shareholder and creditor of the Company.

The two shareholders of the Company are the plaintiff and his wife, Geraldine Ng Mui Ling (“Geraldine Ng”) who each own 50% of the shares in the Company. The plaintiff and Geraldine Ng are also the two directors of the Company. The plaintiff and Geraldine Ng are also the sole directors and shareholders of another company, Salt Films Pte Ltd (“Salt Films”), which is one of the creditors of the Company.

The plaintiff claims that he and Salt Films advanced loans to the Company. The plaintiff also claims that he had not drawn his full salary, remuneration and expenses from the Company since late 2015 to help the Company tide over its financial difficulties. On 5 May 2016, the plaintiff issued and served a statutory demand on the Company for payment of the sums of: Unpaid salary, remuneration and expenses of $85,049.64 as at 31 March 2016; and Loans in the amount of $186,360.32.

The amount of unpaid salary, remuneration and expenses that the plaintiff raised in his submissions ($69,549.64) differs from what he raised in the statutory demand ($85,049.64). I take $69,549.64 to be the correct amount given that this is the sum that the plaintiff exhibited in his 2nd affidavit dated 5 July 2016. The plaintiff exhibited an extract from the Company’s accounts, which shows that the plaintiff had received payment of $15,500, which was the difference between $69,549.64 and $85,049.64, as payment for his salary for November 2015 and partial payment for his salary for December 2015. Nothing turns on this inconsistency because on either amount, the debt exceeds the statutory minimum of $10,000 under s 254(2)(a) of the Companies Act. The statutory demand also contains the notice that in the event of the Company’s refusal and/or failure and/or neglect to make payment of the sums within three weeks from the date of service of the demand, the Company would be deemed to be unable to pay its debts and winding up proceedings may be commenced against it.

The Company did not pay the Debt, or offer to secure or compound the debt after the three week period prescribed under the statutory demand. The plaintiff then filed the present application to wind up the Company on the ground that the Company is deemed to be unable to pay its debt and was insolvent by operation of s 254(1)(e) read with s 254(2)(a) of the Companies Act.

The schedule tendered by the plaintiff to the Court shows that the Company has 36 creditors including the plaintiff. The schedule is reproduced below:

No Name Creditors’ Claim Correct Amount (as in the records of the Company)
1 Yap Ming Yang $210.00 $495.00
2 Li Jia Ling $356.20 $356.20
3 Sng Ye Xiang $485.00 $485.00
4 Jessleen Loy $700.00 $250.00
5 Yuka Kamamoto $930.00 $930.00
6 Choong Mun Lok $1,001.50 $3,426.50
7 Soh Zhi Min Pamela $1,031.20 $993.75
8 Wong Wan Yu $1,081.25 $1,081.25
9 Tan Ji Sheng Dylan $1,531.25 $168.75
10 Tan Jie Kai Leslie $1,531.25 $1,531.25
11 Shawn Kelvin Fonseka $2,002.89 $2,002.89
12 Sin Kam Heng $2,353.75 $2,353.75
13 Lee Zhi Han Joanna $2,750.00 $2,750.00
14 Tan Lip Hwee Jason $3,000.00 $3,000.00
15 Chu Kok Yong $3,180.00 $3,260.00
16 Chia Wing Keong $3,828.75 $7,752.51
17 Andrew Poh Joon Di $4,327.15 $4,717.80
18 Lee Wei Wen $5,000.00 $5,000.00
19 Sabrina Simone Tan Siok Min $5,000.00 $5,000.00
20 Siau Xindi $8,200.00 $7,200.00
21 Grace Song Jia En $9,100.00 $1,800.00
22 Ngoh Siew Hoong $9,100.00 $8,700.00
23 Abdul Wahid Bin Subarmah $11,648.00 $8,449.00
24 Diva Models (S) Pte Ltd $11,550.00 $11,550.00
25 Lee Wei Hao Ernest $11,648.00 $563.00
26 Tan Zuo Quan $19,450.00 $7,950.00
27 Fanny Seah Gek Swee $29,650.00 $29,650.00
28 Yap Kok Jiunn $33,000.00 $33,000.00
29 Song Zu Singapore $123,333.40 $127,345.90
30 Iceberg Design Pte Ltd $128,677.50 $128,677.50
31 Bert Lighting House Pte Ltd $170,490.29 $165,416.79
32 Tribeca Management Pte Ltd $2,600.00 $2,600.00
33 Christian Eber $3,500.00 $3,500.00
34 Salt Films Pte Ltd $1,194,018.27 $1,194,018.27
35 Papillon Designers’ Gallery Pte Ltd $19,367.00 $19,367.00
36 [The plaintiff] $255,909.96 $255,909.96

In total, the company owes $2,081,542.61 to its creditors based on the claims made by its creditors. At the winding up proceedings, 32 creditors of the Company, representing $608,747.38 of the Company’s debt raised objections (“the opposing creditors”) over the plaintiff’s application to wind up the Company and asked that the plaintiff’s application be dismissed or stayed. three creditors of the Company, representing $1,216,885.17 of the Company’s debt supported the plaintiff’s application to wind up the Company.

30 opposing creditors consisting of the 1st to the 30th creditor listed in the table above at [7] are represented by Mr Aditya Naidu (“Mr Aditya”). The 31st opposing creditor, Bert Lighting House Pte Ltd (“Bert Lighting”) is represented by Mr Nicolas Tang (“Mr Tang”). The 32nd opposing creditor, Tribeca Management Pte Ltd (“Tribeca”) is represented by Ms Annsley Wong (“Ms Wong”).

The arguments raised by Mr Aditya, Mr Tang and Ms Wong in their submissions can be summed as follows. First, the opposing creditors argue that the winding up application was an abuse of process. Their case is that the plaintiff orchestrated the situation of indebtedness that led to the present winding up application, and that it was thus disingenuous for the plaintiff to allege that the Company failed to reply his statutory demand or dispute the debt because the plaintiff himself is one of the two directors who has...

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