Teo Song Kwang Richard v Seng Hup Electric Co (S) Pte Ltd

• Jurisdiction: Singapore
• Judge: S Rajendran J
• Judgment Date: 24 May 2001
• Neutral Citation: [2001] SGHC 105
• Docket Number: Originating Summons Bankruptcy (Registrar's Appeal No 600043 of 2001)
• Date: 24 May 2001
• Published date: 19 September 2003
• Year: 2001
• Plaintiff Counsel: Chelva Rajah SC and MK Eusuff Ali (Tan Rajah & Cheah)
• Citation: [2001] SGHC 105
• Defendant Counsel: Suresh Divyanathan (Drew & Napier)
• Court: High Court (Singapore)
• Subject Matter: Time,Payment of instalment on 5 February,O 3 r 2(5) Rules of Court,Bankruptcy,Whether court ought to exercise residual discretion to set aside statutory demand,4 February a Sunday,Clause providing entire balance payable if any instalment paid more than four days after due date,Insolvency Law,Whether Saturday and Sunday to be excluded in reckoning of time,Prescribed period of time,Bankruptcy Act (Cap 20, 2000 Ed) s 62,Statutory demand,Instalment due on 31 January,Computation,Bankruptcy Rules (Cap 20, R 1, 1996 Ed) r 98(2)(e),Consent judgment requiring payment of instalments on last day of each month

: The terms of a settlement agreement between the plaintiff Richard Teo Song Kwang (`RT`) and the defendants Seng Hup Electric Co (S) Pte Ltd (`SHE`) contained, inter alia, the following provisions:

4 RT agrees to pay SHE the sum of $1,500,000.00, on terms set out below, which sum SHE accepts as full and final settlement and discharge of all claims as set out in Suit No. 1656 of 1999 and Suit No. 1674 of 1999.

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6 SHE and RT agree that the sum of $1,500,000.00 shall be paid in the following manner:

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(b) Equal instalments of $56,250.00 for the first nine (9) months to SHE;

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(e) Each of the above instalment shall be payable on the last day of each calendar month, the first instalment being due and payable on 31 August 2000;

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11 In the event that any of the above payments is late by more than four (4) days from its due date, all outstanding instalments become due and payable immediately and SHE shall be entitled to levy execution for such outstanding amount.

This settlement agreement was reached after many days of negotiation between the solicitors for the respective parties and was incorporated into and formed part of a consent judgment between the parties dated 8 August 2000 in Suit Nos 1656/99 and 1074/99.

Pursuant to the terms of the consent judgment, RT, through his solicitors (M/s Tan Rajah & Cheah) paid the instalments for the first five months to the solicitors for SHE (M/s Drew & Napier). The dispute in this case arose in respect of the payment for the sixth instalment which, under cl 6(e) was payable on the last day of January 2001. If the sixth instalment was paid more than four days from 31 January 2001 then, by the terms of cl 11, the entire outstanding balance would become immediately due and payable.

RT wanted to pay that sixth instalment (of $56,250) by Monday, 5 February 2001, and Tan Rajah & Cheah so informed Drew & Napier. Drew & Napier, by their letter to Tan Rajah & Cheah of 2 February 2001 refused this request and stated:

As explained, our clients are not agreeable to the receipt of the 6th installment payment on Monday, 5 February 2001 as this will be past the 4 days grace period provided for in the Settlement Agreement dated 8 August 2000.

In keeping with our office hours, if your clients are unable to make payment of the 6th installment by 5:30pm today, you may must [ sic] payment to us on Saturday, 3 February 2001 between 9:00am and 1:00pm by contacting our duty solicitor, Mr Ajay Advani at 97652935 to arrange for receipt of the same.

On Saturday, 3 February 2001, Tan Rajah & Cheah forwarded to Drew & Napier their cheque for $45,662 as part payment of the sixth instalment. The letter stated:

We refer to the telephone conversation between your Mr Suresh Divyanathan and our Mr Eusuff Ali yesterday afternoon.

Our clients are unable to make full payment today. However, we enclose herewith our OCBC cheque (Cheque No. 010782) for $45,662/- in your favour as part payment of the 6th instalment sum. As the last due date falls tomorrow which is a Sunday, we shall forward you the balance ($10,588) on Monday, 5th February 2001.

In their response on Monday, 5 February 2001, Drew & Napier invoked cl 11 of the consent judgment and demanded payment of the entire balance outstanding. Their letter read:

We refer to our fax dated 2 February 2001 and your letter dated 3 February 2001.

Clause 11 of the Settlement Agreement dated 8 August 2000 ("Agreement") provides that if your client, Mr Richard Teo, is late by more than four (4) days in the payment of any instalments, ` all outstanding statements become due and payable immediately and [our clients] shall be entitled to levy execution for such outstanding amount`.

As of this morning, 5 February 2001, we have only received payment of $45,662 out of a total of $56,250 due for the 6th instalment on 1 February 2001. Our clients have elected to enforce their contractual rights under Clause 11 of the Agreement. Please let us have the balance of $1,023,088 by 4:00pm, Monday 12 February 2001 failing which our clients will exercise their right to levy execution for any amount outstanding.

That same morning (5 February 2001), Tan Rajah & Cheah forwarded to Drew & Napier the balance of $10,588 due on the sixth instalment.

On 6 February 2001, Drew & Napier wrote to Tan Rajah & Cheah as follows:

We refer to your letter dated 5 February 2001.

As we explained in the teleconversation between your Mr Eusuff Ali and our Suresh Divyanathan on 2 February 2001, we are of the view that Clause 11 of the Settlement Agreement dated 8 August 2000 ("Agreement") applies if payment is made on Monday, 5 February 2001. This was reiterated in our letter of the same date subsequent to the teleconversation.

Clause 6(e) of the Agreement requires payment to be made on the last day of each calendar month. Your clients have consistently been late in making payments and have made generous and frequent use of the 4 day grace period provided in the Agreement. On this occasion, in addition to taking their usual liberties in making payment past the deadline in Clause 6(e), your clients have also breached the 4 day grace period provided by the Agreement. It is clear to us that such exquisite delay fully entitles our clients to their right to demand immediate payment of the total outstanding balance under Clause 11 of the Agreement.

The fact that that the 4th and final day of the grace period allowed falls on a Sunday is irrelevant as your clients should have made payment on 31 January 2001 in the

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