Re Ice-Mack Pte Ltd

• Judge: Yong Pung How J
• Judgment Date: 15 September 1989
• Neutral Citation: [1989] SGHC 80
• Citation: [1989] SGHC 80
• Defendant Counsel: Emily Wilfred and Wong Sheng Kuai (Official Receiver)
• Published date: 19 September 2003
• Plaintiff Counsel: Andrew Chia (TQ Lim & Co)
• Date: 15 September 1989
• Docket Number: Companies Winding Up No 11 of 1983
• Court: High Court (Singapore)
• Subject Matter: Proof of debt,Debt owing by 'associated' company,Winding up,Director purportedly paying debts,Equity,Proof of debt owed by 'associated' company,s 327 Companies Act (Cap 50, 1988 Ed),Claim for repayment,Director paying debt on behalf of company,Evidence necessary for proof of debt,Standard of proof,Satisfaction,Same person controlling companies,Burden to prove debt,Whether payment of debt by director extinguishes debt,Evidence of debt,Proof of debt in winding up,Director purportedly paying debt,rr 78 & 81 Companies (Winding-Up) Rules 1969,Companies,Proof of evidence,Evidence

Cur Adv Vult

In this matter, Ice-Mack Pte Ltd (the company) was wound up by the High Court on 11 March 1983 and the Official Receiver was appointed liquidator. AA Valibhoy & Sons (1907) Pte Ltd (the applicant), which was an associate company, filed a proof of debt on 2 September 1985 for $2,428,418.49. Apart from some pages from the applicant`s own ledger books, there were no other documents to support the applicant`s claim. After several reminders to the applicant to provide proof of debt, the Official Receiver, as liquidator, rejected the claim on the ground that it was not supported by documentary evidence. On 2 August 1988, the applicant appealed to the High Court for the Official Receiver`s decision to be reversed or varied and for the claim to be admitted in full.

In the winding up of a company, s 327 of the Companies Act (Cap 50, 1988 Ed) provides that claims against the company are admissible to proof against the company. The procedure for proof is set out in the Companies (Winding-Up) Rules 1969, under which the burden of proof is cast on the claimant. Rules 78 and 81 provide as follows:

78 In a winding up by the court every creditor shall prove his debt, unless the judge in any particular winding up shall give directions that any creditors or class of creditors shall be admitted without proof.

81(1) A statutory declaration proving a debt shall be in the Form 77 set out in the Second Schedule to the Regulations and shall contain a statement of account showing the proofs of debt and shall specify the vouchers, if any, by which the same can be substantiated.

(2) The liquidator to whom the proof is sent may at any time call for the production of the vouchers.

In considering the appeal, the High Court had before it four affidavits on behalf of the applicant by Mr Mohd Yunus Valibhoy, described in the affidavits as the former manager and director and in a board minutes of the applicant as the former chairman and managing director of the applicant, filed on 27 January 1989, 25 February 1989, 3 March 1989 and 9 March 1989; and three affidavits by or on behalf of the Official Receiver filed on 9 February 1989, 2 March 1989 and 8 March 1989. It is instructive to follow the sequence of these affidavits.

In his first affidavit on behalf of the applicant filed on 27 January 1989, Mr Valibhoy averred that during the period from 1979 to 1982 the applicant made various `loans and payments for and on behalf of the company amounting to $2,428,419.49 to enable the company to continue in business.` At the material time, he was not only either the manager and director or the chairman and managing director of the applicant, but he was also a director of the company. As evidence of the debt, Mr Valibhoy annexed to his affidavit photocopies of the relevant pages of the applicant`s ledger for the period from 1979 to 1982. On 9 February 1989, the Official Receiver filed an affidavit in reply. In noting that the claim was said to have arisen from loans and payments for and on behalf of the company, the Official Receiver pointed out that these were the same ledger pages which had been submitted earlier in proof of debt, and had been rejected. The ledgers were merely the applicant`s own internal records of accounts, and parts of a double entry system. The primary documents to substantiate a claim would be credit and debit notes, vouchers and receipts. These documents had been asked for by the Official Receiver on several occasions to substantiate the applicant`s claim, but had never been produced.

On 25 February 1989, Mr Valibhoy filed a second affidavit exhibiting to it copies of the applicant`s audited accounts for the years ended 31 December 1979, 1980, 1981 and 1982. Of these, the audited accounts for 1982 were said to show a sum of $2,428,418.49 due and owing by the company to the applicant. On 2 March 1989, the Official Receiver`s accountant filed an affidavit in reply. This pointed out that these audited accounts exhibited for the four years did not show any such debt. For the years 1979, 1980 and 1981 the lists of associate concerns owing money to the applicant showed that the amounts due from the company to the applicant were only $7,250.65, $32,343.56 and $486,170.40 respectively; and for the year 1982 the total amount due from associate concerns (which, unlike earlier years, was not broken down to show the amount due from each individual concern) was only $79,592.16.

On 3 March 1989, Mr Valibhoy filed his third affidavit which exhibited a breakdown of the total amount of $79,592.16 owed by associate companies to the applicant as at 31 December 1982. The list of debtors set out in this breakdown did not include the company. Mr Valibhoy admitted that the breakdown did not disclose any debt owed by the company to the applicant at that date; but he explained that this was only because at that time the company had been wound up, and he had agreed to bear the debt personally so that the applicant would not be put to loss. Accordingly, the breakdown also set out a separate list of the directors who had debts to the applicant as at 31 December 1982 and this showed a debt of $2,538,190.19 owed by Mr Valibhoy to the applicant. Whatever his reasons were for agreeing to bear any debt personally, the reason given for doing so could not be correct, in this case, since the company was only wound up on 11 March 1983. As evidence of this, however, his affidavit exhibited a copy of the minutes of a board meeting of the applicant which was specifically called for the purpose on 2 April 1984, which was attended by his wife Mrs Mehroon Neesha Valibhoy, and another director Mr Mohd Yunus A Gani, and was chaired by him, at which:

It was resolved that

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