Liew Kai Lung Karl v Ching Chiat Kwong

• Jurisdiction: Singapore
• Court: High Court (Singapore)
• Judge: Chan Seng Onn J
• Judgment Date: 30 April 2015
• Neutral Citation: [2015] SGHC 122
• Citation: [2015] SGHC 122
• Subject Matter: Statutory Demand,Insolvency Law,Bankruptcy
• Docket Number: Originating Summons (Bankruptcy) No 15 of 2015 (Registrar’s Appeal No 89 of 2015)
• Date: 30 April 2015
• Defendant Counsel: Sim Kwan Kiat and Eugene Tan (Rajah & Tann Singapore LLP)
• Hearing Date: 13 April 2015
• Published date: 01 May 2015
• Plaintiff Counsel: The plaintiff in person

Chan Seng Onn J: Introduction

The plaintiff, who was the director of Realm Capital Limited (“Realm Capital”), had applied in Originating Summons (Bankruptcy) No 15 of 2015 (“OSB 15”) to set aside a statutory demand dated 14 October 2014 for a sum of $2,209,863.01 (“the SD”) which was served on him through his solicitors on 15 October 2014. Prior to OSB 15, the defendant had commenced bankruptcy proceedings against the plaintiff in Originating Summons (Bankruptcy) No 2552 of 2014 (OSB 2552).

In OSB 15, the plaintiff applied for (a) an extension of time to make the application to set aside the SD issued against him; (b) the SD to be set aside; and (c) alternatively, that the SD be declared manifestly irregular, invalid, null and void and of no effect. The assistant registrar dismissed the plaintiff’s application in OSB 15. The plaintiff appealed and the matter came before me. After hearing the parties, I dismissed the appeal. As the plaintiff has filed an appeal against my decision, I now give my reasons.

Extension of time to set aside the SD

Under r 97(1)(a) of the Bankruptcy Rules (Cap 20, s 166, 2006 Rev Ed), the plaintiff had 14 days from the date on which the SD was served to apply to court to set aside the SD. The SD was served on 15 October 2015 (the plaintiff disputed that this was valid service but this was irrelevant to the immediate issue at hand) which meant that an application to set aside the SD had to be made by end October 2014. The plaintiff filed OSB 15 on 24 February 2015. This was almost 4 months out of time. However, under r 97(3), the court was empowered to grant an extension of time to a debtor to make his application to set aside a statutory demand.

In Rafat Ali Rizvi v Ing Bank NV Hong Kong Branch [2011] SGHC 114, Kan Ting Chiu J provided the following four factors that the court would have to take into consideration when an application for an extension of time was made by a debtor: (a) the period of the delay; (b) the reasons for the delay; the grounds for setting aside the statutory demand; and (d) the prejudice that might result from an extension of time (at [32]). The weightage of each factor was not cast in stone but was fact dependent. In that case, Kan J noted that a delay of eight days was quite long and the reasons provided for the delay were not strong. Nevertheless, the extension was granted since the plaintiff had presented a good case that the statutory demand should be set aside for non-compliance with s 61(1)(d) of the Bankruptcy Act (Cap 20, 2009 Rev Ed) and the extension would not have prejudiced the defendant.

In Oversea-Chinese Banking Corp Ltd v Ravichandran s/o Suppiah [2015] SGHC 1, Aedit Abdullah JC held that a delay of about a year did not disqualify the defendant from making an attempt at setting aside the statutory demand. In that case, the defendant had been acting in person for a substantial period of that delay.

In Thu Aung Zaw v Norb Creative Studio [2014] SGHC 67, the plaintiff’s application was made more than four months out time and no separate application for an extension of time was made. Despite this, Lee Seiu Kin J waived the procedural irregularity of the plaintiff and permitted the application to set aside the statutory demand. The court was of the opinion that there was no substantial injustice or prejudice suffered by the defendant as a consequence of the irregularity. The court then dispensed with the application for an extension of time and proceeded to hear the application. It thus seemed to me that the threshold to grant an application for an extension of time to a debtor to make his application to set aside a statutory demand was not a particularly high one.

In this case, there was a substantial delay of about four months. The plaintiff was represented during this time but claimed that he was not satisfied with the services provided by his solicitors at that time. The plaintiff then discharged his solicitors and acted in person after that. He further claimed that he only received the documents pertaining to his bankruptcy proceedings on 17 February 2015. I did not find this to be a sufficient reason to account for the delay. Counsel for the defendant pointed out that the plaintiff’s solicitors had...