L & M Geotechnic v CEP Instruments: Setting Aside Default Judgment & Proof of Debt in Winding Up
In the High Court of Singapore, Lai Siu Chiu J. ruled on the originating summons by the liquidators of CEP Instruments Pte Ltd (in liquidation) regarding the proof of debt filed by L & M Geotechnic Pte Ltd. The court addressed whether a default judgment obtained by L & M against CEP Instruments should be set aside and whether L & M's proof of debt based on that judgment should be rejected or admitted. The court ordered that the judgment dated 22 July 2002 was to stand and the liquidators were to accept the proof of debt filed by L & M on 11 November 2002.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Judgment dated 22 July 2002 to stand; Liquidators to accept the Proof of Debt filed by L & M on 11 November 2002.
1.3 Case Type
Insolvency
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
High Court case regarding L & M Geotechnic's proof of debt in CEP Instruments' winding up, focusing on setting aside a default judgment.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| L & M Geotechnic Pte Ltd | Petitioner | Corporation | Judgment dated 22 July 2002 to stand; Liquidators to accept the Proof of Debt filed by L & M on 11 November 2002 | Won | |
| CEP Instruments Pte Ltd (in liquidation) | Respondent | Corporation | Liquidators' application dismissed | Lost | |
| CEP Holdings Pte Ltd | Respondent | Corporation | Application dismissed | Lost | |
| Teo Koon Eng | Respondent | Individual | Application dismissed | Lost | |
| Teo Li Lin | Respondent | Individual | Application dismissed | Lost | |
| Annie Koh Wee Meng | Respondent | Individual | Application dismissed | Lost | |
| Goh Hung Huat | Respondent | Individual | Application dismissed | Lost | |
| Peter Chee Yam Sin | Respondent | Individual | Application dismissed | Lost | |
| Chwee Lin Hoo | Respondent | Individual | Application dismissed | Lost | |
| Poh Cher Kin | Respondent | Individual | Application dismissed | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Lai Siu Chiu | Judge | Yes |
4. Counsels
4. Facts
- L & M obtained a judgment debt against CEP Instruments in Suit No 1564 of 2001 for $975,016.75.
- A winding up order was granted against CEP Instruments on 11 October 2002.
- L & M filed a proof of debt for $1,032,557.27 based on the judgment debt.
- The Company's directors and contributories systematically stripped the Company of its assets and transferred them to related parties.
- The Company failed to comply with an “unless order” to file AEICs, resulting in a default judgment.
- The contributories had recovered $1,043,661.65 from the contributories.
- The contributories failed to instruct the Company’s solicitors to defend the claim vigorously instead of allowing L & M to enter default judgment thereon.
5. Formal Citations
6. Timeline
| Date | Event |
|---|---|
| CEP Instruments commenced Magistrate’s Court Suit No 28487 of 2001 against L & M. | |
| L & M filed a defence and counterclaim against CEP Instruments in the MC Suit. | |
| L & M applied to the High Court to transfer the MC Suit. | |
| The transfer application was granted. | |
| CEP Instruments applied to strike out L & M’s defence and counterclaim. | |
| The striking-out application was dismissed. | |
| CEP Instruments filed its reply and defence to L & M’s counterclaim. | |
| The court made directions for filing lists of documents and summons for directions. | |
| L & M filed its list of documents. | |
| CEP Instruments filed its list of documents. | |
| CEP Instruments filed the summons for directions. | |
| The court ordered the filing of AEICs and setting down the Suit for trial. | |
| Deadline for parties to file and exchange AEICs. | |
| Deadline for CEP Instruments to set down the Suit for trial. | |
| Pre-trial conference held; “unless order” given. | |
| Deadline for CEP Instruments to exchange AEICs per the “unless order”. | |
| L & M entered judgment against CEP Instruments on its counterclaim. | |
| Court granted a winding up order against CEP Instruments Pte Ltd. | |
| L & M filed a proof of debt. | |
| The Liquidators filed this originating summons. | |
| An order was granted by Judith Prakash J on the OS, by consent of the Liquidators, L & M and the contributories of the Company. | |
| L & M applied to court for preliminary issues to be tried. | |
| The Application was heard. | |
| Hearing dates of 2 to 6 August 2004 were vacated. | |
| Decision Date |
7. Legal Issues
- Setting Aside Default Judgment
- Outcome: The court held that there was no merit in the contributories' arguments for going behind the default judgment.
- Category: Procedural
- Sub-Issues:
- Failure to comply with unless order
- Intentional and contumelious conduct
- Prejudice to the other party
- Related Cases:
- [1999] 1 SLR 750
- [2003] 1 BCLC 338
- Proof of Debt in Winding Up
- Outcome: The court ordered the liquidators to accept the proof of debt filed by L & M.
- Category: Substantive
- Sub-Issues:
- Admissibility of proof of debt based on default judgment
- Going behind the judgment
8. Remedies Sought
- Admission of Proof of Debt
- Declaration and Payment of Dividends
9. Cause of Actions
- Breach of Contract
10. Practice Areas
- Commercial Litigation
- Insolvency
- Winding Up
11. Industries
- No industries specified
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Federal Insurance Co v Nakano Singapore (Pte) Ltd | Court of Appeal | Yes | [1992] 1 SLR 390 | Singapore | Cited for the principle that questions of construction of documents are suitable for decision as preliminary points unless there are factual disputes. |
| Syed Mohamed Abdul Muthaliff v Arjan Bhisham Chotrani | Court of Appeal | Yes | [1999] 1 SLR 750 | Singapore | Cited for the factors to determine when the conduct of a party who failed to comply with an “unless order” would be considered to be intentional and contumelious. |
| Re Menastar Finance Ltd | N/A | Yes | [2003] 1 BCLC 338 | N/A | Cited for the principle that there was no merit in the contributories' arguments for going behind the default judgment obtained by L & M. |
13. Applicable Rules
| Rule Name |
|---|
| Rules of Court (Cap 322, R 5 1997 Rev Ed) O 14 r 12 |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act (Cap 50, 1994 Rev Ed) s 254(2)(a) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Unless order
- Default judgment
- Proof of debt
- Winding up
- Liquidators
- Contributories
- Asset stripping
- Judgment debt
15.2 Keywords
- winding up
- proof of debt
- default judgment
- unless order
- contributories
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Civil Procedure | 90 |
| Winding Up | 85 |
| Insolvency Law | 80 |
| Judgments and Orders | 75 |
| Company Law | 70 |
| Liquidation | 60 |
16. Subjects
- Insolvency
- Civil Procedure
- Companies Law