Phang Choo Ong v Gilcom Investment: Stay of Winding Up Application

Mr. Phang Choo Ong, the sole director and shareholder of Gilcom Investment Pte Ltd, applied to the High Court of Singapore for a stay of the winding up order against Gilcom. The winding up order was granted following Gilcom's failure to comply with a statutory demand from LRG Investments Pte Ltd. Chua Lee Ming JC dismissed the application, finding that Gilcom was insolvent regardless of the default judgment. The court awarded costs to LRG Investments Pte Ltd.

1. Case Overview

1.1 Court

High Court of the Republic of Singapore

1.2 Outcome

Application for stay of winding up dismissed.

1.3 Case Type

Insolvency

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Application for stay of winding up order for Gilcom Investment dismissed due to insolvency. The court found no grounds to halt insolvency proceedings.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Phang Choo OngPlaintiffIndividualApplication DismissedLost
Gilcom Investment Pte LtdDefendantCorporationWinding up order remains in effectLost
LRG Investments Pte LtdNon-PartyCorporationCosts AwardedWon
MC Marine ServicesNon-PartyCorporationNeutralNeutral

3. Judges

Judge NameTitleDelivered Judgment
Chua Lee MingJudicial CommissionerYes

4. Counsels

Counsel NameOrganization
Sarbinder SinghKertar Law LLC
David ChanShook Lin & Bok LLP
Tan Su HuiShook Lin & Bok LLP
Amelia TanShook Lin & Bok LLP

4. Facts

  1. Gilcom was ordered to be wound up for failing to comply with a statutory demand.
  2. Phang, Gilcom's sole director and shareholder, applied for a stay of the winding up.
  3. LRG is Gilcom's creditor and initiated the winding up application.
  4. Gilcom, LRG, and AAFH were parties to a Memorandum of Agreement regarding a property development project.
  5. LRG paid US$7m to Gilcom through AAFH as insurance premium for an investment bond.
  6. The Investment Fund was not disbursed, and the US$7m became refundable to LRG.
  7. Gilcom owed AAFH the US$7m, and repayment depended on a refund from Allianz.

5. Formal Citations

  1. Phang Choo Ong v Gilcom Investment Pte Ltd (LRG Investments Pte Ltd and another, non-parties), Originating Summons No 763 of 2015, [2016] SGHC 97

6. Timeline

DateEvent
Memorandum of Agreement signed
First tranche of US$7m paid to Gilcom through AAFH
Second tranche of US$7m paid to Gilcom through AAFH
Investment Fund was to be disbursed to LRG
LRG commenced Suit 121 of 2015 against Gilcom
Writ of summons served on Gilcom
LRG obtained judgment in default of Gilcom’s appearance
LRG applied to wind up Gilcom
Winding up order granted
Gilcom applied to set aside the default judgment
Gilcom withdrew the application to set aside the default judgment
MCM filed a proof of debt of S$462,390 against Gilcom
Hearing date
Hearing date
Judgment date

7. Legal Issues

  1. Stay of Winding Up Order
    • Outcome: The court dismissed the application for a stay of the winding up order.
    • Category: Procedural
    • Sub-Issues:
      • Proof of Solvency
      • Interests of Creditors
  2. Insolvency
    • Outcome: The court found that Gilcom was insolvent and therefore a stay of the winding up order was not warranted.
    • Category: Substantive

8. Remedies Sought

  1. Stay of Winding Up Order

9. Cause of Actions

  • No cause of actions

10. Practice Areas

  • Insolvency
  • Corporate Law

11. Industries

  • Investment

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Interocean Holdings Group (BVI) Ltd v Zi-Techasia (Singapore) Pte LtdHigh CourtYes[2014] 2 SLR 485SingaporeCited for the principle that a stay halts winding up proceedings and permits the officers of the company to continue in control.
Krextile Holdings Pty Ltd v Widdows; Re Brush Fabrics Proprietary LimitedSupreme Court of VictoriaYes[1974] VR 689AustraliaCited for the principle that if a perpetual stay of the winding up is granted, the company can resume the conduct of its business and affairs as if no winding up existed.
Chimbusco International Petroleum (Singapore) Pte Ltd v Jalalludin bin Abdullah and other mattersHigh CourtYes[2013] 2 SLR 801SingaporeCited for the principle that the onus is on the applicant to show why it is appropriate to stay the winding up rather than to let the insolvency proceedings run their normal course.
In re Calgary and Edmonton Land Co LtdChancery DivisionYes[1975] 1 WLR 355England and WalesCited for the principle that the applicant must make out a case that carries conviction.
The Ayer Molek Rubber Co Bhd v Bintang-Bintang Sdn BhdHigh CourtYes[2013] 4 MLJ 401MalaysiaCited for the principle that the court is obliged to also consider events which occurred between the date the winding up petition was filed and the date the stay application is heard.
In the matter of Glass Recycling Pty LtdSupreme Court of New South WalesYes[2014] NSWSC 439AustraliaCited for the principle that an applicant for a stay has to show that the state of affairs that required the company to be wound up no longer exists and where the winding up was on the ground of insolvency, the applicant has to show that the company is solvent.
Doolan, in the matter of MIH Company Pty Ltd (in liq) v MIH Company Pty Ltd (in liq)Federal Court of AustraliaYes[2015] FCA 1130AustraliaCited for the principle that an applicant for a stay has to show that the state of affairs that required the company to be wound up no longer exists and where the winding up was on the ground of insolvency, the applicant has to show that the company is solvent.
Expile Pty Ltd v Jabb’s Excavations Pty LtdSupreme Court of New South WalesYes(2003) 45 ACSR 711AustraliaCited for the principle that mere assertions of solvency will not be sufficient.
Kon Yin Tong and another v Leow Boon Cher and othersHigh CourtYes[2011] SGHC 228SingaporeCited for the principle that the ability to repay debts, presently due, at a future time does not demonstrate solvency.
Re Mascot Home Furnishers Pty Ltd (in liquidation)Supreme Court of VictoriaYes[1970] VR 593AustraliaCited for the principle that where the company is insolvent, carrying on business and obtaining credit would present a grave commercial risk to persons dealing with it, and such companies should remain wound up.
Ting Yuk Kiong v Mawar Biru Sdn BhdHigh CourtYes[1995] 2 MLJ 700MalaysiaCited for the principle that where the company is insolvent, carrying on business and obtaining credit would present a grave commercial risk to persons dealing with it, and such companies should remain wound up.
In re Telescriptor Syndicate, LimitedCourt of AppealYes[1903] 2 Ch 174England and WalesCited for the principle that where the directors have failed to comply with their statutory duties to give information to the official receiver or to furnish a statement of affairs, the court may refuse a stay until it is satisfied that the trading operations of the company have been “fair and above board”.
Re Warbler Pty LtdSupreme Court of New South WalesYes(1982) 6 ACLR 526AustraliaCited for the principle that a stay would be refused if the interests of the creditors, the members and the liquidator are not protected.
Re Allebart Pte LtdSupreme Court of New South WalesYes[1971] 1 NSWLR 24AustraliaCited for the principle that a stay is unlikely to be granted if arrangements are not made to pay the creditors.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Companies Act (Cap 50, 2006 Rev Ed) s 279(1)Singapore
Companies Act (Cap 50, 2006 Rev Ed) s 4Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Winding Up
  • Stay of Proceedings
  • Insolvency
  • Statutory Demand
  • Memorandum of Agreement
  • Investment Fund
  • Default Judgment

15.2 Keywords

  • winding up
  • stay of winding up
  • insolvency
  • companies act
  • gilcom
  • phang choo ong
  • LRG Investments

17. Areas of Law

Area NameRelevance Score
Insolvency Law95
Winding Up95
Company Law40
Judgments and Orders20

16. Subjects

  • Insolvency
  • Company Law
  • Civil Procedure