Re Makin Nominees Pte Ltd

• Jurisdiction: Singapore
• Judge: Lim Teong Qwee JC
• Judgment Date: 25 June 1994
• Neutral Citation: [1994] SGHC 172
• Docket Number: Companies Winding Up No 294 of 1993
• Date: 25 June 1994
• Published date: 19 September 2003
• Year: 1994
• Plaintiff Counsel: Loh Wai Mooi and Andrew Ang (Bih Li & Lee)
• Citation: [1994] SGHC 172
• Defendant Counsel: Cheong Yuen Hee and Manoj Kumar Roy (Hilborne & Co)
• Court: High Court (Singapore)
• Subject Matter: Whether petition was an abuse of process,Whether a substantial dispute existed as to the liability to pay,Whether demand valid,Statutory letter of demand including an amount not due,Whether petition was an enforcement of a judgment,Whether discretion should be exercised to allow oral evidence,Petition based on a demand for payment of a judgment debt,Facts alleged not raised in the affidavits,Whether pending foreign proceedings relevant consideration,Taking of oral evidence,Adjournment,Companies,Winding up

This is a petition by Ong & Co Pte Ltd for an order that the abovenamed company, Makin Nominees Pte Ltd, may be wound up on the ground that it is unable to pay its debts and for consequential orders.

The petitioner carries on the business of a securities broker and the company was its customer. In 1986, the petitioner issued proceedings against the company to recover the outstanding balance due and owing to it on the company`s share trading account. Mak Kok, a director of the company, was a guarantor of the account and was joined as second defendant. On 21 November 1986 judgment was entered against them for $6,731,855.20 and $170,417.38 interest and for $700 costs on an application for summary judgment. They appealed and, on 8 October 1992, after the hearing had been adjourned by agreement of the parties the appeal was dismissed. See Ong & Co Ltd v Makin Nominees Pte Ltd & Anor

,1 where Warren LH Khoo J said, at p 292:

I ... dismissed the defendants` appeal against the assistant registrar`s judgment on the ground that the defendants were effectively precluded by the settlement agreement from proceeding with it.

The settlement agreement referred to was an agreement in writing dated 29 July 1987 (not 19 March 1987 as stated in the report of the judgment) and made between the company, Mak Kok, and the petitioner. It was executed under the common seal of the company and as a deed by Mak Kok, but was signed by a representative on behalf of the petitioner. I shall return to the settlement agreement later but, for the moment, it is sufficient to note that it provides for deferred payment of $6,494,351.83 (called `the total indebtedness`) which includes $5,481,172.94 (called `the principal sum`) and which is less than what the petitioner is entitled to under the judgment but Mak Kok has to provide collaterals to the value of $4,342,871.83. Clause 10 provides:

If any of the moneys due and payable to the [petitioner] under cl 1(a) or 1(b) or 1(c) herein is not paid within 14 days after the due date as provided herein, or the collateral referred to in cl 2(a) herein is not provided in accordance with cl 2(a) ... then

A if the judgment has not been set aside at the time of default, then:

(a) the [petitioner] shall be at liberty to enforce the judgment for a sum equivalent to the total of the following:

(i) so much of the principal sum as is unpaid, and

(ii) ...

(iii) costs and interest as has been granted under the judgment and further interest under the Rules of the Supreme Court 1970, and

(b) [the company] and [Mak Kok] shall not appeal against the judgment or apply for a stay of execution thereof or for an injunction against execution thereof, and the judgment shall not merge into this agreement, ...

The company defaulted in payment under cll 1(a), (b) and (c) and the collaterals were not provided under cl 2(a) and, as at 11 July 1991, the company was, as alleged by the petitioner, indebted to it in the sum of $5,385,268.06. By its solicitors` letter dated 5 August 1993 served on the company by leaving it at its registered office, the petitioner required the company to pay the sum of $5,385,268.06 without prejudice to its right to further interest. A statement of account was served with the letter.

It appears from the statement that the amount claimed is the sum for which the petitioner was entitled to enforce the judgment under cl 10A(a). On 25 November 1993 this petition was presented.

Application for adjournment

At the commencement of the hearing, Mr Cheong applied for an adjournment sine die and gave two grounds, which were:

(1) registration of the judgment in Malaysia had not been finally disposed of; and

(2) Malaysian solicitors of Mak Kok had advised that, as soon as he filed an affidavit to oppose bankruptcy proceedings in Malaysia, there would be a hearing within six months and that if he succeeded, this petition would be restored for hearing but if he failed, then he would make full payment. His affidavit had been filed five months ago but the matter had not been heard.

Mr Roy following said that Mak Kok had the money ready and could pay within a few days into court if necessary. Ms Loh opposed the application. However attractive the suggestion as to payment into court may have appeared although it is far from clear how this was to be done I could not allow the application. The Malaysian proceedings are clearly irrelevant. The judgment is final and no more avenues of appeal remain open.

Application for directions

Mr Cheong then applied under para (c) of s 257(2) of the Companies Act (Cap 50, 1990 Ed) for an order directing that oral evidence be taken as to the issue whether or not there was a collateral oral agreement between the petitioner and the company whereby the petitioner agreed not to proceed against the company after signing the settlement agreement of 29 July 1987. The application was also opposed.

Section 93 of the Evidence Act (Cap 97, 1990 Ed) provides:

When the terms of a contract ... have been reduced by ... the parties to the form of a document ... no evidence shall be given in proof of the terms of such contract ... except the document itself ... .

Undoubtedly, the terms of the contract between the company, Mak Kok and the petitioner have been reduced by them to the form of the settlement agreement dated 29 July 1987. Section 94 provides:

When the terms of any such contract ... have been proved according to section 93, no evidence of any oral agreement ... shall be admitted as between the parties to any such instrument ... for the purpose of contradicting, varying, adding to, or substracting from its terms ... .

In paras 6 and 6.1 of his affidavit filed on 8 February 1994 Mak Kok says:

6 On 21 November 1986, the petitioner obtained summary judgment against the respondent company and myself personally, for the sum of S$6,731,855.20 together with interest and costs (hereinafter called `the said judgment sum`). (A copy of the said judgment order dated 21 November 1986 is annexed and marked `MK-2`.)

(6.1) Thereafter all the petitioner, myself and the respondent company entered into a deed of settlement dated 29 July 1987 to amicably resolve the matter. (A copy of the deed of settlement dated 29 July 1987 is annexed and marked `MK-3`.)

The settlement agreement is the document referred to as the deed of settlement dated 29 July 1987. The company has defaulted in payment under cll 1(a), (b) and (c) and the collaterals have not been provided under cl 2(a) as noted above. See also Ong & Co Ltd v Makin Nominees Pte Ltd & Anor , where Warren LH Khoo J said at p 291:

It is common ground that the defendants subsequently defaulted in complying with the terms of the agreement and the defendants were still in default at the time of the hearing of this appeal. In the circumstances, prima facie, the provision of cl 10A(b) is applicable, and the defendants are precluded from appealing against the judgment and from applying for a stay of execution.

Clause 10A(a) expressly provides that, upon such an eventuality, the petitioner is at liberty to enforce the judgment albeit for a sum less than what it would otherwise be entitled to do. It seems to me that the collateral oral agreement, if proved, will clearly contradict cl 10A(a). If the petitioner cannot proceed against the company, it certainly cannot enforce the judgment. Mr Cheong submitted that liberty to enforce the judgment does not entitle the petitioner to petition for the company to be wound up. If I understood him correctly, he was now saying that by the collateral oral agreement the petitioner agreed not to petition for the company to be wound up and not as he had said in his application that the petitioner agreed not to proceed against the company . This is a substantial departure from the application. He referred to Re Parker Davies & Hughes Ltd . In that case, a legal aid certificate issued to the petitioner was to the effect that he was entitled to legal aid `as defendant in connexion with the following proceedings`. The proceedings were the defence and the counterclaim in an action by the company against him. The certificate then continued with the expression `and to enforce any order or agreement made in connexion with the said proceedings`. The petitioner obtained judgment in those proceedings for £313 and petitioned for the company to be wound up. He failed and on the issue of costs the question was whether the petitioner was entitled to legal aid in the winding up proceedings, ie whether his petition for the winding up of the judgment debtor was a proceeding to enforce the judgment within the meaning of that expression in the legal aid certificate. Roxburgh J was content to hold that he was bound by the ratio decidendi in Re A Company and held that the petitioner was not entitled to legal aid in the winding up proceedings.

In Re A Company

3 the petitioner was a judgment creditor having obtained judgment against the company for £1,200 damages for libel. Section 1(1) of the Courts (Emergency Powers) Act 1914 then in force provided:

... no person shall -

(a) proceed to execution on, or otherwise to the enforcement of, any judgment or order of any Court ... for the payment or recovery of a sum of money ... except after such application to such Court ... as may be provided for ... .

He petitioned for the company to be wound up without having made any attempt to issue execution or to apply to any court to do so. In the Court of Appeal, Lord Cozens-Hardy MR said, at p 525:

I think it is plain that a winding-up petition is not execution on a judgment.

and later, at pp 525-526:

It remains to consider the subsequent words `or otherwise to the enforcement of` the judgment. Those words seem to me to be designed to meet the common case in which the judgment creditor obtains a receiver when he cannot get legal execution.

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