Wei Giap Construction Co (Pte) Ltd v Intraco Ltd

• Jurisdiction: Singapore
• Judge: D C D'Cotta J
• Judgment Date: 22 June 1978
• Neutral Citation: [1978] SGHC 33
• Docket Number: Companies Winding Up No 86 of 1977
• Date: 22 June 1978
• Year: 1978
• Published date: 19 September 2003
• Plaintiff Counsel: Anthony CS Yap ( Shook Lin & Bok)
• Citation: [1978] SGHC 33
• Defendant Counsel: Goh Aik-Chew (Goh Aik-Chew)
• Court: High Court (Singapore)
• Subject Matter: Whether petition should be granted,Insolvency Law,Debt owed to company to be wound up,Discretion of the court,Petition,Whether reason against winding up,Winding up,Recovery of debt

Cur Adv Vult

A winding up order was made against the appellants on the presentation of a petition pursuant to s 217(1)(b) of the Companies Act (Cap 185) by the respondents. The ground on which the petitioning creditors is relying for the proceedings herein is found in s 218(1)(e) of the said Act which empowers the court to order the winding-up of a company if the company in question is unable to pay its debts. In sub-s (2)(a) of the same section, it is provided that the company is deemed to be unable to pay its debts if a creditor has served on the company by leaving at its registered office a demand for payment exceeding the sum of $500 and the company has for three weeks thereafter neglected to pay the sum or to secure or compound for it to the creditors` satisfaction.

It is not disputed that:

(a) the petitioners obtained judgment against the appellants on 20 April 1977 in Suit No 933 of 1977 for the sum of $71,570.13 with interest thereon at the rate of 8% pa from the date of judgment until the date of payment;

(b) the petitioners by letter dated 22 April 1977 served the said judgment on the appellants together with a demand for payment of the judgment debt;

(c) the appellants have not to date paid the judgment debt or any part thereof;

(d) between 29 April 1977 and 30 May 1977 settlement of the judgment debt by instalments was negotiated and finalised but the appellants defaulted; consequently the petition herein was presented by the petitioners;

(e) the petitioners` papers are in order and were properly filed, advertised and served in compliance with the rules.

It is also not disputed that the appellants` total liabilities are in the region of about $3m owing to about 150 creditors. There is an amount of about $1,881,601.13 being owed to the company by about nine debtors. Of these nine debtors, there are three whose total debts amount to about $1,300,000.00 which call for some comment. The first of the three, Wei Leong Construction Co are alleged to owe the appellants the sum of $266,932.00. A receiving order has been made against this firm on 29 July 1977 in Bankruptcy Nos 869 and 882 of 1976. As regards the next debtor Teng Ta who is alleged to owe the sum of $27,817.00 a winding-up order was made against this firm in winding up No 49 of 1977 on 27 May 1977; such being the position the likelihood of recoverability from these two firms is almost nil except for some dividends which the Official Assignee or Official Receiver might declare in the event of there being any funds. The third debtor is alleged to be the DBS Realty Pte Ltd whose indebtedness to the appellants is reputed to be in the region of $1,087,083.00. However, in a joint affidavit made on 1 November 1977 by Bay Kwee Chai and Loh Chai Chon, two directors and shareholders of the appellants, a sum of $28,000 only is certified as being due for payment by the DBS Realty Pte Ltd.

There is no evidence whether any payment has been received from the other debtors, or whether even a demand has been made for payment and apart from the sum of $28,000 allegedly owing by DBS Realty Pte Ltd the balance due to the appellants can be written off. While on the subject of creditors and debtors, it is also pertinent to note that a number of creditors whose debts total over $850,000.00 are supporting the petition while some creditors with debts amounting to $1m are opposing the petition. It is most difficult to ascertain the exact number of creditors and the amounts involved as many creditors are changing horses in mid-stream so frequently that to pin point with any degree of accuracy is out of the question. Some of the creditors opposing the petition have filed affidavits to the effect that if the appellants were allowed to continue to operate the chances of the creditors recovering what was due to them would be greater. There is also a third category of creditors who I shall quite appropriately designate as neutral in so far as they have not expressed an opinion either way.

There is a further allegation by the appellants that they have a `possible` claim for $3,773,157.00 against the DBS Realty Pte Ltd for damages for breach of contract. A report in this connection was made for the appellants by Mr Eric Lim Ang Beng Hock, a Chartered Quantity Surveyor. It is not the function of the court to adjudicate upon the merits of this claim but the appellants although placing sole reliance on the claim against the DBS for funds to meet its...