Re Management Recruiters International (Asia) Pte Ltd (formerly known as Humana International (Asia) Pte Ltd)

CourtHigh Court (Singapore)
JudgeChoo Han Teck JC
Judgment Date13 August 2002
Neutral Citation[2002] SGHC 179
Citation[2002] SGHC 179
Docket NumberCompanies Winding Up No 33 of 2002
Subject MatterPetitioner founding winding up petition on inadmissible evidence,Stay of winding up proceedings,Admissibility of evidence,Whether to grant petition,Dismissal of winding up petition,Whether admission of debt in such correspondence can support petition for winding up,Option to either dismiss or stay winding up petition,Winding up,Relevancy of such evidence,Evidence,Costs,Affidavit evidence,Whether admissible,Counterclaim against petitioner,Standard or indemnity basis,Whether to award costs on indemnity or standard basis,Whether to stay or dismiss petition,Nature of such evidence,Civil Procedure,"Without prejudice" correspondence,Company failing to pay debt,Need for debt to be unambiguous and clearly above statutory sum,Amount of debt in dispute,Petitioner asserting existence of indisputable debt,Whether dispute as to debt genuine and plausible,ss 254(1)(e) & 254(2)(a) Companies Act (Cap 50, 1994 Ed),Nature of such correspondence,Companies
Date13 August 2002
Plaintiff CounselEngelin Teh SC, Daniel Koh and Wendy Yu (Engelin Teh Practice LLC)
Published date19 September 2003
Defendant CounselMohan Pillay, Paul Sandosham and Tan Teck Wang (Wong Partnership)for the respondent



1. This was a petition by MRI Worldwide Ltd to wind up the respondent company, Management Recruiters International (Asia) Pte Ltd under s 254(2)(a) of the Companies Act, Ch 50. The basis of the petition was that the company is insolvent and unable to pay its debts amounting to 62,366.32.

2. The petitioner is an international management recruitment company that sells franchises of its name and operations to franchisees all over the world. The respondent is one such franchisee, having signed two franchise agreements, namely, the Singapore Franchise Agreement and the Malaysia Franchise Agreement. The respondent also signed two other agreements known as the International Master Franchise Agreement and the Umbrella Agreement with the petitioner. By these agreements, the respondent was permitted to grant sub-franchises to other parties upon payment of requisite royalty fees and commissions to the petitioner. The fee and commission structures are not important for the proceedings before me. The contractual obligations that are relevant are the terms requiring the respondent to report monthly sales and gross revenues, and to pay promptly all fees due.

3. On 10 May 2002 the petitioner terminated all the agreements it signed with the respondent on the ground of "persistent defaults". The main ones being the failure to pay royalties and not reporting of payments received from the sub-franchisees as required under the agreements. Prior to that, on 14 December 2001, the parties agreed on a schedule for the payment of monies due from the respondent to the petitioner. The matter was not resolved satisfactorily and fresh negotiation began on 29 January 2002. More correspondence followed. Even after the agreements were terminated the parties were still writing to each other. The more significant letters were two letters dated 17 May 2002, one from the respondent to the petitioner and the other a reply by the latter to the former; as well as a letter from the respondent's solicitors to the petitioner dated 28 May 2002.

4. Mrs. Teh, counsel for the petitioner submitted that the respondent owes a debt of 62,366.32, but even if the exact amount is disputed, there is no dispute that there is a debt owed which exceeds the statutory amount of $10,000 entitling the petitioner to petition for a winding up order against the respondent. The respondent challenges the petition on three grounds. The first of these grounds is that the petition was founded...

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