TYC Investment Pte Ltd v Chan Siew Lee: Effect of Bankruptcy on Directorship & Articles of Association
In TYC Investment Pte Ltd v Jannie Chan Siew Lee and Henry Tay Yun Chwan, the Singapore High Court addressed the effect of a bankruptcy order and its subsequent setting aside on Jannie Chan's directorship in TYC Investment Pte Ltd. The court held that the setting aside of the bankruptcy order automatically reinstated Chan as a permanent Governing Director. The court dismissed TYC's application and allowed Chan's counterclaim regarding her reinstatement.
1. Case Overview
1.1 Court
High Court of the Republic of Singapore1.2 Outcome
The court held that setting aside the bankruptcy order had the effect of automatically reinstating Jannie Chan as a permanent Governing Director of TYC Investment Pte Ltd.
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Singapore High Court judgment on the effect of bankruptcy and its subsequent setting aside on a director's position in TYC Investment Pte Ltd.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Jannie Chan Siew Lee | Defendant | Individual | Counterclaim Allowed in Part | Partial | |
| Henry Tay Yun Chwan | Defendant | Individual | Neutral | Neutral | |
| TYC Investment Pte Ltd | Plaintiff | Corporation | Prayers Dismissed | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Audrey Lim | Judicial Commissioner | Yes |
4. Counsels
4. Facts
- Jannie Chan and Henry Tay established TYC Investment Pte Ltd and were its two directors.
- Chan was made a bankrupt in September 2016 by a third party.
- The bankruptcy order against Chan was subsequently set aside on appeal.
- TYC lodged a notification with ACRA that Chan had been disqualified as a director due to her bankruptcy.
- TYC claimed Chan's directorship had been vacated due to her bankruptcy, relying on Article 72(b) of Table A of the Companies Act.
- Chan counterclaimed that she was still a permanent Governing Director and that Article 72 of Table A was inapplicable.
- TYC's articles of association stated that Chan and Tay were the permanent Governing Directors until they resigned.
5. Formal Citations
- TYC Investment Pte Ltd v Chan Siew Lee Jannie and another, Originating Summons No 453 of 2017, [2017] SGHC 202
6. Timeline
| Date | Event |
|---|---|
| TYC Investment Pte Ltd incorporated | |
| Deed of Settlement signed between Henry Tay Yun Chwan and Chan Siew Lee | |
| Agreement for Amendment to Deed of Settlement and Settlement of Litigation signed | |
| TYC Deed signed between Henry Tay Yun Chwan, Chan Siew Lee and TYC Investment Pte Ltd | |
| ANZ Bank obtained judgment debt against JC in Suit 885 of 2013 | |
| Bankruptcy order made against Jannie Chan | |
| TYC lodged notification with ACRA that JC had been disqualified as a director | |
| Appeal against bankruptcy order allowed and bankruptcy order set aside | |
| TYC's Extraordinary General Meeting held | |
| Hearing of Originating Summons | |
| Judgment reserved |
7. Legal Issues
- Effect of Bankruptcy on Directorship
- Outcome: The court held that while the bankruptcy order initially vacated Jannie Chan's directorship, the subsequent setting aside of the order automatically reinstated her as a director.
- Category: Substantive
- Sub-Issues:
- Automatic vacation of office
- Reinstatement of directorship after setting aside bankruptcy order
- Related Cases:
- [1904] 1 Ch 276
- [1984] 1 WLR 1202
- [2007] 8 MLJ 50
- [1907] 2 Ch 370
- Interpretation of Articles of Association
- Outcome: The court held that Article 72 of Table A (regarding bankruptcy) did not contradict Article 8 of the TYC Articles, and thus applied to vacate Jannie Chan's directorship upon her bankruptcy.
- Category: Substantive
- Sub-Issues:
- Conflict between Table A and specific articles
- Meaning of 'permanent' Governing Director
- Related Cases:
- [1959] 1 Ch 199
- Effect of Setting Aside Bankruptcy Order
- Outcome: The court held that the setting aside of the bankruptcy order had the effect of automatically reinstating Jannie Chan as a permanent Governing Director of TYC.
- Category: Substantive
- Sub-Issues:
- Retrospective effect of setting aside order
- Automatic reinstatement of directorship
- Related Cases:
- [2007] FCAFC 73
- (2004) 139 FCR 14
- [2011] 3 SLR 1031
- [2012] 1 SLR 228
- [2006] NSWCA 72
8. Remedies Sought
- Declaration that Henry Tay can appoint another director
- Declaration that TYC can convene an EGM to appoint a new director
- Declaration that clause 10 of the SSD is frustrated
- Declaration that TYC can reimburse Amstay for payments made on TYC’s behalf
- Declaration that Jannie Chan is a permanent Governing Director
- Order that TYC file notification with ACRA indicating that Jannie Chan is a director
9. Cause of Actions
- Declaration regarding directorship
- Frustration of contract
10. Practice Areas
- Corporate Governance
- Bankruptcy Law
11. Industries
- Investment
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| TYC Investment Pte Ltd v Tay Yun Chwan Henry | High Court | Yes | [2014] 4 SLR 1149 | Singapore | Cited for background facts pertaining to the parties. |
| Chan Siew Lee v TYC Investment Pte Ltd and others and another appeal | Court of Appeal | Yes | [2015] 5 SLR 409 | Singapore | Cited for background facts pertaining to the parties. |
| Re The Bodega Company Limited | High Court | Yes | [1904] 1 Ch 276 | England and Wales | Cited for the principle that a director automatically vacates office upon the occurrence of a triggering event as stated in the articles of association. |
| Samuel Tak Lee v Chou Wen Hsien | Privy Council | Yes | [1984] 1 WLR 1202 | Hong Kong | Cited for the principle that automatic vacation of a directorship occurs upon the happening of a certain event as provided in the articles of a company. |
| Norakhmar bt Baharom v Lee Ming Leong | High Court | Yes | [2007] 8 MLJ 50 | Malaysia | Cited in support of the principle that automatic vacation of a directorship occurs upon the happening of a certain event as provided in the articles of a company. |
| Glossop v Glossop | High Court | Yes | [1907] 2 Ch 370 | England and Wales | Cited to contrast with Re Bodega and Samuel Tak Lee, illustrating that the effect of a particular article depends on its true construction. |
| Holmes v Keyes | Court of Appeal | Yes | [1959] 1 Ch 199 | England and Wales | Cited for the principle that articles of association should be construed to give them reasonable business efficacy. |
| Tan Teck Guan v Mapletree Trustee Pte Ltd (trustee of Mapletree Industrial Trust) | High Court | Yes | [2011] 3 SLR 1031 | Singapore | Cited for the principle that the effect of an annulment of a bankruptcy order is retrospective, but subject to exceptions. |
| Lim Lye Hiang v Official Assignee | Court of Appeal | Yes | [2012] 1 SLR 228 | Singapore | Cited for affirming the principle enunciated in Tan Teck Guan regarding the retrospective effect of annulment of a bankruptcy order. |
| Union Club v Lord Andrew Charles Robert Battenberg | New South Wales Court of Appeal | Yes | [2006] NSWCA 72 | Australia | Cited to contrast with the present case, illustrating that parties can contractually agree to depart from the general principle of retrospective effect of annulment. |
| De Robillard v Carver | Federal Court of Australia | Yes | [2007] FCAFC 73 | Australia | Cited for the principle that setting aside a sequestration order on appeal means the appellant is not to be treated as bankrupt from the pronouncement of the order. |
| Rangott v Marshall | Federal Court of Australia | Yes | (2004) 139 FCR 14 | Australia | Cited for the principle that the effect of setting aside a sequestration order is as if the order had never been made and the respondent had never been a bankrupt. |
| Commissioner for Railways (NSW) v Cavanough | High Court of Australia | Yes | (1935) 53 CLR 220 | Australia | Cited for the principle that the reversal of a judgment restores the party to all things lost by reason of the judgment, but acts done in execution of the judgment prior to it being set aside are protected. |
| Wiseman v Wiseman | Court of Appeal | Yes | [1953] 2 WLR 499 | England and Wales | Cited for the principle that when a decree absolute is set aside, the marriage becomes void from that moment but the avoidance does not relate back so as to render the child in the marriage illegitimate. |
| Shuttleworth v Cox Brothers and Company | King's Bench Division | Yes | [1927] 2 KB 9 | England and Wales | Cited for the principle that it is not the task of the court to manage the affairs of a company. |
| Smallcombe v Olivier | Court of Exchequer | Yes | (1844) 13 M & W 77 | England and Wales | Cited for the principle that an order for annulling a fiat in bankruptcy does not invalidate previous proceedings under the fiat. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act (Cap 50, 2006 Rev Ed) | Singapore |
| Bankruptcy Act (Cap 20, 2009 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Bankruptcy order
- Setting aside
- Permanent Governing Director
- Articles of association
- Table A
- Directorship
- Reinstatement
- Companies Act
- Extraordinary general meeting
- Deed of settlement
15.2 Keywords
- bankruptcy
- directorship
- articles of association
- company law
- Singapore
- TYC Investment
- Jannie Chan
- Henry Tay
- reinstatement
- governing director
17. Areas of Law
16. Subjects
- Company Law
- Bankruptcy
- Corporate Governance