Starluck Construction Pte Ltd v HSS Engineering Pte Ltd

JudgeChan Seng Onn J
Judgment Date01 April 2013
Neutral Citation[2013] SGHC 72
CourtHigh Court (Singapore)
Docket NumberCompanies Winding Up No 170 of 2012
Published date01 April 2013
Hearing Date01 March 2013,08 February 2013
Plaintiff CounselBeh Eng Siew (Lee Bon Leong & Co)
Defendant CounselThirumurthy Ayernaar Pambayan (Murthy & Co)
Subject MatterCompanies,Winding Up
Citation[2013] SGHC 72
Chan Seng Onn J:

This was a petition by Starluck Construction Pte Ltd (“the Plaintiff”) for a winding up order to be made against HSS Engineering Pte Ltd (“the Defendant”) on the ground that the Defendant had been unable to pay its debts under s 254(1)(e) of the Companies Act (Cap 50, 2006 Rev Ed) (“the Companies Act”). After hearing the parties, I allowed the petition.

The Defendant has appealed against my decision. I now set out my reasons.

It was undisputed that the Defendant owed the Plaintiff a sum of $2,827,504.40 as of 26 September 2012 (“the Sum”). The Sum arose out of a Judgment dated 16 August 2012 awarded in favour of the Plaintiff for money owed by the Defendant to the Plaintiff pursuant to construction work done on the Defendant’s building.

It was also undisputed that the Plaintiff served a statutory demand on 26 September 2012 at the Defendant’s registered office and that the Defendant subsequently failed to pay the Sum or any part thereof within three weeks.

Therefore, the Plaintiff successfully raised the presumption of insolvency under s 254(2)(a) of the Companies Act which provides as follows:

Definition of inability to pay debts

A company shall be deemed to be unable to pay its debts if — a creditor by assignment or otherwise to whom the company is indebted in a sum exceeding $10,000 then due has served on the company by leaving at the registered office a demand under his hand or under the hand of his agent thereunto lawfully authorised requiring the company to pay the sum so due, and the company has for 3 weeks thereafter neglected to pay the sum or to secure or compound for it to the reasonable satisfaction of the creditor.

In response, the Defendant argued that it was not insolvent because: It could earn a monthly profit of between $150,000 and $250,000 from renting out its factory building and land for the next 12 to 13 years; The factory building and land could be sold for between $10m to $12m on the open market; and Maybank was still willing to loan the Defendant a sum of $4m (although it bears noting that the letter of offer from Maybank was dated 2 September 2010).

In my opinion, the Defendant’s arguments failed to rebut the statutory presumption of insolvency. The Defendant did not provide any evidence to substantiate its claims that the factory and land can be rented out or sold for the amounts asserted. As for the purported $4m loan offer from...

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1 cases
  • Tarkus Interiors Pte Ltd v The Working Capitol (Robinson) Pte Ltd
    • Singapore
    • High Court (Singapore)
    • 30 April 2018
    ...Bank of India v Surya Pharmaceutical (Singapore) Pte Ltd [2015] SGHC 258 at [14]; Starluck Construction Pte Ltd v HSS Engineering Pte Ltd [2013] SGHC 72 at [7] (“Starluck Construction”). The defendant sought to show that it was solvent. Mr Gattie referred to the defendant’s 2017 “statement ......
3 books & journal articles
  • Bankruptcy and insolvency
    • United Kingdom
    • Construction Law. Volume III - Third Edition
    • 13 April 2020
    ...(S) Pte Ltd [2019] SGHC 195 at [11], per Chan Seng Onn J. 154 See, for example, Starluck Construction Pte Ltd v HSS Engineering Pte Ltd [2013] SGHC 72. 155 Bankruptcy Rules (Cap 20, R1) (Sing) rule 97(1)(a). 156 “Appears” being the operative word: the court, on a setting aside application, ......
  • Insolvency Law
    • Singapore
    • Singapore Academy of Law Annual Review No. 2013, December 2013
    • 1 December 2013
    ...against the bankruptcy orders. Winding up Presumption of insolvency 17.13 In Starluck Construction Pte Ltd v HSS Engineering Pte Ltd[2013] SGHC 72, the plaintiff creditor served a statutory demand on the defendant company on a judgment debt. The defendant company failed to pay the sums dema......
  • Insolvency Law
    • Singapore
    • Singapore Academy of Law Annual Review No. 2018, December 2018
    • 1 December 2018
    ...276 at [85]. 22 Re Dayang Construction and Engineering Pte Ltd [2002] 2 SLR(R) 197 at [40]. 23 [2018] SGHC 105. 24 [2015] SGHC 258. 25 [2013] SGHC 72. 26 [2018] SGHC 214. 27 Chip Thye Enterprises Pte Ltd v Phay Gi Mo [2004] 1 SLR(R) 434 at [17]. 28 See BNP Paribas v Jurong Shipyard Pte Ltd ......

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