Teo Song Kwang Richard v Seng Hup Electric: Bankruptcy - Setting Aside Statutory Demand
In Teo Song Kwang Richard v Seng Hup Electric Co (S) Pte Ltd, the High Court of Singapore heard an appeal by Richard Teo Song Kwang against the decision to dismiss his application to set aside a statutory demand issued by Seng Hup Electric Co (S) Pte Ltd. The statutory demand was based on an alleged breach of a consent judgment where Teo was required to make installment payments, and a clause stipulated that the entire balance would become due if any payment was late by more than four days. The court allowed the appeal, finding that the payment was not late due to the application of O 3 r 2(5) of the Rules of Court, which excludes weekends when calculating periods of seven days or less.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Appeal allowed.
1.3 Case Type
Bankruptcy
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Appeal regarding a statutory demand. The court considered whether a late installment payment triggered a clause making the entire balance due.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Teo Song Kwang Richard | Appellant | Individual | Appeal allowed | Won | |
| Seng Hup Electric Co (S) Pte Ltd | Respondent | Corporation | Appeal dismissed | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| S Rajendran | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| MK Eusuff Ali | Tan Rajah & Cheah |
| Chelva Rajah SC | Tan Rajah & Cheah |
| Suresh Divyanathan | Drew & Napier |
4. Facts
- RT and SHE entered into a settlement agreement incorporated into a consent judgment.
- The agreement required RT to pay SHE $1,500,000 in installments.
- Clause 11 of the agreement stipulated that the entire balance would become due if any installment was late by more than four days.
- The sixth installment was due on January 31, 2001.
- RT made a partial payment on Saturday, February 3, 2001, and the balance on Monday, February 5, 2001.
- SHE invoked clause 11 and demanded the entire outstanding balance.
- SHE served a statutory demand on RT for the outstanding balance.
5. Formal Citations
- Teo Song Kwang Richard v Seng Hup Electric Co (S) Pte Ltd, Originating Summons Bankruptcy 600022/2001,RA 600043/2001, [2001] SGHC 105
6. Timeline
| Date | Event |
|---|---|
| Consent judgment issued | |
| First installment due | |
| Sixth installment due | |
| Drew & Napier refused request to accept payment on February 5 | |
| Part payment of sixth installment made | |
| Balance of sixth installment forwarded | |
| Drew & Napier reiterated demand for outstanding balance | |
| Statutory demand served on RT | |
| Application heard by deputy registrar | |
| Liberty to commence bankruptcy proceedings granted | |
| Appeal allowed |
7. Legal Issues
- Setting Aside Statutory Demand
- Outcome: The court exercised its discretion to set aside the statutory demand.
- Category: Procedural
- Sub-Issues:
- Residual discretion to set aside statutory demand
- Computation of Time
- Outcome: The court held that O 3 r 2(5) of the Rules of Court applied, excluding the weekend in the calculation of the payment deadline.
- Category: Substantive
- Sub-Issues:
- Exclusion of weekends in reckoning time
- Interpretation of consent judgment clauses
8. Remedies Sought
- Setting aside of statutory demand
9. Cause of Actions
- Breach of Contract
10. Practice Areas
- Bankruptcy
- Commercial Litigation
11. Industries
- Finance
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Re A Debtor (No 1 of 1987) | English Court of Appeal | Yes | [1989] 2 All ER 46 | England | Cited for the principle that a statutory demand should be set aside if it would be unjust to conclude the debtor is unable to pay the debt. |
| Re A Debtor (No 1 of 1987) | English Court of Appeal | Yes | [1989] 1 WLR 271 | England | Cited for the principle that a statutory demand should be set aside if it would be unjust to conclude the debtor is unable to pay the debt. |
| Pembinaan KSY Sdn Bhd v Lian Seng Properties Sdn Bhd | High Court of Malaysia | No | [1993] 1 MLJ 316 | Malaysia | Cited by the respondent to argue that O 3 r 2(5) of the Rules of Court does not apply when the time period is more than seven days, but distinguished by the court on the facts. |
| Morgan Guaranty Trust Co of New York v Lian Seng Properties Sdn Bhd | N/A | Yes | [1989] 3 MLJ 172 | Malaysia | Cited as a decision that runs counter to Pembinaan KSY Sdn Bhd v Lian Seng Properties Sdn Bhd. |
13. Applicable Rules
| Rule Name |
|---|
| O 3 r 2 Rules of Court |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Bankruptcy Act (Cap 20, 2000 Ed) s 62 | Singapore |
| Bankruptcy Rules (Cap 20, R 1, 1996 Ed) r 98(2)(e) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Statutory demand
- Consent judgment
- Settlement agreement
- Instalment payment
- Grace period
- Bankruptcy Act
- Rules of Court
- Computation of time
15.2 Keywords
- Bankruptcy
- Statutory Demand
- Consent Judgment
- Time Computation
- Rules of Court
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Bankruptcy | 75 |
| Statutory Demand | 70 |
| Consent Judgment | 65 |
| Contract Law | 60 |
| Computation of Time | 55 |
| Civil Procedure | 50 |
16. Subjects
- Bankruptcy
- Contract Law
- Civil Procedure