Tang Yoke Kheng v Lek Benedict: Fraudulent Trading & Winding Up Dispute

Tang Yoke Kheng, trading as Niklex Supply Co, appealed against the dismissal of her action under s 340(1) of the Companies Act against Lek Benedict, Lim Wee Chuan, and Tan Te Teck Gregory in the Court of Appeal of Singapore on 2005-05-13. Tang alleged that the respondents fraudulently transferred assets from Amrae Benchuan Trading Pte Ltd to Axum Marketing Pte Ltd to avoid paying debts. The court dismissed the appeal, finding that Tang had not proven the elements of fraud.

1. Case Overview

1.1 Court

Court of Appeal

1.2 Outcome

Appeal Dismissed

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Appeal concerning fraudulent trading under s 340(1) of the Companies Act. The court dismissed the appeal, finding no proof that respondents used a new company to defraud creditors.

1.7 Decision Date

12 May 2005

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Tan Te Teck Gregory	Respondent	Individual	Judgment in favour of Respondent	Won	Daryll Ng of Haridass Ho and Partners Nicole Tan of Haridass Ho and Partners
Lek Benedict	Respondent	Individual	Judgment in favour of Respondent	Won	Daniel John of Lim Ang John and Tan LLC Lim Fung Peen of Lim Ang John and Tan LLC
Lim Wee Chuan	Respondent	Individual	Judgment in favour of Respondent	Won	Daniel John of Lim Ang John and Tan LLC Lim Fung Peen of Lim Ang John and Tan LLC
Tang Yoke Kheng (trading as Niklex Supply Co)	Appellant	Individual	Appeal Dismissed	Lost	P Suppiah of P Suppiah and Co Elengovan Krishnan of P Suppiah and Co

3. Judges

Judge Name	Title	Delivered Judgment
Chao Hick Tin	Justice of Appeal	No
Choo Han Teck	Judge	Yes
Tan Lee Meng	Judge	No

4. Counsels

Counsel Name	Organization
Daryll Ng	Haridass Ho and Partners
Nicole Tan	Haridass Ho and Partners
Daniel John	Lim Ang John and Tan LLC
Lim Fung Peen	Lim Ang John and Tan LLC
P Suppiah	P Suppiah and Co
Elengovan Krishnan	P Suppiah and Co

4. Facts

The appellant, Niklex Supply Co, was the principal supplier to Amrae Benchuan Trading Pte Ltd.
The first and second respondents were directors and shareholders of Amrae Benchuan Trading Pte Ltd.
Amrae Benchuan Trading Pte Ltd owed substantial trade debts to the appellant.
A consent judgment was entered against Amrae Benchuan Trading Pte Ltd for $1,070,000.
The appellant recovered $59,710.46, leaving $1,010,289.54 unsatisfied.
The appellant obtained a winding-up order against Amrae Benchuan Trading Pte Ltd on 19 September 2003.
The respondents set up Axum Marketing Pte Ltd and transferred goods from Amrae Benchuan Trading Pte Ltd to Axum.

5. Formal Citations

Tang Yoke Kheng (trading as Niklex Supply Co) v Lek Benedict and Others, CA 100/2004, [2005] SGCA 27

6. Timeline

Date	Event
2002-01-01	Consent judgment entered against Amrae Benchuan Trading Pte Ltd in Suit No 21 of 2002 for $1,070,000
2003-09-19	Winding-up order obtained against Amrae Benchuan Trading Pte Ltd
2003-09-25	Suit No 864 of 2003 commenced by the appellant
2001-06-04	Axum Marketing Pte Ltd incorporated
2005-05-13	Appeal dismissed

7. Legal Issues

Fraudulent Trading
- Outcome: The court found that the appellant had not discharged her burden of proof and rejected the allegations of fraud.
- Category: Substantive
- Sub-Issues:
  - Intent to defraud creditors
  - Dissipation of assets
  - Use of new company to avoid debts
- Related Cases:
  - [1984] QB 675
  - [1998] 1 SLR 447
Standard of Proof in Civil Cases Involving Fraud
- Outcome: The court reiterated that the standard of proof in a civil case, including cases where fraud is alleged, is that based on a balance of probabilities.
- Category: Procedural
- Sub-Issues:
  - Balance of probabilities
  - Degree of probability commensurate with the occasion
- Related Cases:
  - [1957] 1 QB 247
  - [1951] P 35
  - [1996] AC 563

8. Remedies Sought

Personal liability for the debts of Amrae Benchuan Trading Pte Ltd under s 340(1) of the Companies Act

9. Cause of Actions

Fraudulent Trading
Conspiracy

10. Practice Areas

Commercial Litigation
Insolvency Law

11. Industries

Trading
Supply Chain

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
R v Grantham	Queen's Bench	Yes	[1984] QB 675	England and Wales	Cited as a starting point in the definition of fraud in s 340(1) situations.
Rahj Kamal bin Abdullah v PP	High Court	Yes	[1998] 1 SLR 447	Singapore	Relied upon for the definition of fraud and the inference of dishonest intention from surrounding circumstances.
In re William C Leitch Brothers, Limited	Chancery Division	No	[1932] 2 Ch 71	England and Wales	Cited for Maugham J’s disavowal of any intention to define fraud.
In re Patrick and Lyon, Limited	Chancery Division	Yes	[1933] Ch 786	England and Wales	Cited for the element of dishonesty involving real moral blame in the definition of fraud.
Aktieselskabet Dansk Skibsfinansiering v Brothers	Hong Kong Court of Final Appeal	Yes	[2001] 2 BCLC 324	Hong Kong	Cited for the proposition that a defendant cannot shelter behind a private standard of honesty.
Woolmington v Director of Public Prosecutions	House of Lords	Yes	[1935] AC 462	England and Wales	Cited for establishing the 'beyond reasonable doubt' standard in criminal cases.
Hornal v Neuberger Products Ltd	Queen's Bench	Yes	[1957] 1 QB 247	England and Wales	Referred to for the standard of proof in civil cases involving fraud.
Bater v Bater	Probate Division	Yes	[1951] P 35	England and Wales	Expresses the idea that the distinction between the two standards is really a difference in the degrees of probabilities.
Miller v Minister of Pensions	High Court	Yes	[1947] 2 All ER 372	England and Wales	Cited to express that 'beyond reasonable doubt' falls short of absolute certainty, and is not proof 'beyond a shadow of doubt'.
Soh Lup Chee v Seow Boon Cheng	High Court	Yes	[2004] SGHC 8	Singapore	Cited regarding the standard of proof when fraud is alleged in civil proceedings.
Vita Health Laboratories Pte Ltd v Pang Seng Meng	High Court	Yes	[2004] 4 SLR 162	Singapore	Cited regarding the standard of proof when fraud is alleged in civil proceedings.
In re H (Minors) (Sexual Abuse: Standard of Proof)	House of Lords	Yes	[1996] AC 563	England and Wales	Sums up the situation regarding the standard of proof in civil cases.
In re G. (A Minor) (Child Abuse: Standard of Proof)	Court of Appeal	Yes	[1987] 1 W.L.R 1461	England and Wales	Suggestions have been made recently regarding proof of allegations of sexual abuse of children.
In re W. (Minors) (Sexual Abuse: Standard of Proof)	Family Division	Yes	[1994] 1 F.L.R. 419	England and Wales	Suggestions have been made recently regarding proof of allegations of sexual abuse of children.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
Section 340(1) Companies Act (Cap 50, 1994 Rev Ed)	Singapore
Evidence Act, (Cap 97, 1997 Rev Ed)	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Fraudulent trading
Winding up
Companies Act
Balance of probabilities
Dishonesty
Intent to defraud
Moral blame
Undue preference

15.2 Keywords

fraudulent trading
winding up
companies act
creditors
fraud
singapore

17. Areas of Law

Area Name	Relevance Score
Winding Up	90
Company Law	80
Fraud and Deceit	75
Commercial Fraud	70
Evidence Law	30
Contract Law	30

16. Subjects

Company Law
Fraud
Civil Litigation
Insolvency