Lai Shit Har v Lau Yu Man: Winding-Up Application as Abuse of Process

The Court of Appeal of Singapore heard an appeal by Lai Shit Har and Wong Yiat Hong Raymond against the High Court's decision to wind up Wellmix Organics (International) Pte Ltd following an application by Lau Yu Man. The court found that Lau Yu Man's winding-up application was an abuse of process, as it was initiated several years after the grounds for winding up existed and shortly before the trial of a suit brought by the Company against Lau Yu Man. The Court of Appeal allowed the appeal, finding that the winding-up application was brought for the collateral purpose of preventing the Company from pursuing its suit against Lau Yu Man.

1. Case Overview

1.1 Court

Court of Appeal of the Republic of Singapore

1.2 Outcome

Appeal Allowed

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Appeal against a winding-up order. The court found the winding-up application was an abuse of process, initiated to prevent a suit against the respondent.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Lai Shit HarAppellantIndividualAppeal AllowedWon
Wong Yiat Hong RaymondAppellantIndividualAppeal AllowedWon
Lau Yu ManRespondentIndividualAppeal DismissedLost
Wellmix Organics (International) Pte LtdDefendantCorporationWinding-up order overturnedWon

3. Judges

Judge NameTitleDelivered Judgment
Chan Sek KeongChief JusticeNo
V K RajahJustice of the Court of AppealYes
Woo Bih LiJudgeNo

4. Counsels

Counsel NameOrganization
Tan Bar TienB T Tan & Company
Winston Quek Seng SoonB T Tan & Company
Zhulkarnain Abdul RahimRodyk & Davidson LLP
Ajinderpal SinghRodyk & Davidson LLP
Philip JeyaretnamRodyk & Davidson LLP
Elizabeth YeoRodyk & Davidson LLP

4. Facts

  1. Lau Yu Man applied to wind up Wellmix Organics (International) Pte Ltd.
  2. Lai Shit Har and Wong Yiat Hong Raymond appealed against the winding-up order.
  3. The Company had suspended its business since 2001.
  4. The winding-up application was filed four years after the ground for winding up existed.
  5. The Company had an ongoing suit against Lau Yu Man.
  6. Lau Yu Man filed the winding-up application shortly before the trial of the suit.
  7. The Judge initially granted the Company time to rectify breaches of the Companies Act.

5. Formal Citations

  1. Lai Shit Har and Another v Lau Yu Man, CA 97/2007, CWU 110/2006, [2008] SGCA 33

6. Timeline

DateEvent
Company incorporated
Company initiated proceedings against Cheer Union Development Ltd
Company discontinued Suit No 600041 of 2000
Company filed Suit No 642 of 2001 against Lau Yu Man
Trial scheduled to commence
Hearing rescheduled
Trial fixed for hearing
Lau Yu Man filed an application for security of costs, further discovery and the production of proof that the Company had authority to commence the Suit
Assistant registrar heard the application
Trial was set to commence but did not materialise
Company appealed against the assistant registrar’s order
Lau Yu Man applied to wind up the Company
Judge heard the winding-up application
Counsel for Lau Yu Man requested the Registry to restore the winding-up application for hearing
Company filed Summons No 2865 of 2007 requesting an extension of time to file its audited accounts as well as a further adjournment of the winding-up application
Judge heard both applications
Decision Date

7. Legal Issues

  1. Abuse of Process
    • Outcome: The court held that the winding-up application was an abuse of process.
    • Category: Procedural
    • Sub-Issues:
      • Collateral purpose
      • Delaying tactics
    • Related Cases:
      • [2006] 1 SLR 582
      • [2008] 2 SLR 565
      • [1989] SLR 533
  2. Winding-Up Application
    • Outcome: The court overturned the winding-up order.
    • Category: Substantive
    • Sub-Issues:
      • Suspension of business
      • Discretion of the court
    • Related Cases:
      • [2007] SGHC 223
      • [2000] HKCFI 800

8. Remedies Sought

  1. Winding up of company

9. Cause of Actions

  • Breach of director's duties

10. Practice Areas

  • Commercial Litigation
  • Insolvency Law

11. Industries

  • No industries specified

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Lau Yu Man v Wellmix Organics (International) Pte LtdHigh CourtYes[2007] SGHC 223SingaporeCited as the second grounds of decision of the Judge, which ordered that the Company be wound up.
Lau Yu Man v Wellmix Organics (International) Pte LtdHigh CourtYes[2007] SGHC 96SingaporeCited as the first grounds of decision of the Judge, where he refused to grant an extension of time to the Company.
Chee Siok Chin v Minister for Home AffairsHigh CourtYes[2006] 1 SLR 582SingaporeCited for the categories of proceedings that would amount to an abuse of process.
NCC International AB v Alliance Concrete Singapore Pte LtdHigh CourtYes[2008] 2 SLR 565SingaporeCited as a case that followed Chee Siok Chin on abuse of process.
Re Mechanised Construction Pte LtdHigh CourtYes[1989] SLR 533SingaporeCited for the principle that a winding-up application brought for a collateral purpose may be summarily dismissed as being an abuse of process.
In the Matter of the Companies Ordinance, Cap 32 and in the Matter of Power Point Engineering LimitedHigh Court of Hong KongYes[2000] HKCFI 800Hong KongCited for the principle that the court retains the residual discretion to consider all the relevant factors before deciding whether or not to wind up the company.
Pacific Recreation Pte Ltd v S Y Technology IncCourt of AppealYes[2008] 2 SLR 491SingaporeCited for the principle that a bona fide dispute was one in which there were triable issues.
Pham Thai Duc v PTS Australian Distributor Pty LtdSupreme Court of New South WalesYes[2005] NSWSC 98New South WalesDistinguished from the present case; cited by the respondent but found not relevant.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Companies Act (Cap 50, 2006 Rev Ed)Singapore
Companies Act (Cap 50, 2006 Rev Ed) s 254(1)(c)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Winding-up application
  • Abuse of process
  • Collateral purpose
  • Suspension of business
  • Bona fide dispute
  • Companies Act
  • Director's duties

15.2 Keywords

  • winding up
  • abuse of process
  • company law
  • litigation
  • singapore

17. Areas of Law

Area NameRelevance Score
Winding Up95
Abuse of Process90
Company Law75
Fiduciary Duties60
Civil Procedure50

16. Subjects

  • Company Law
  • Insolvency Law
  • Civil Procedure