Tarkus Interiors v The Working Capitol: Winding Up Application Based on Inability to Pay Debts
Tarkus Interiors Pte Ltd applied to the High Court of Singapore to wind up The Working Capitol (Robinson) Pte Ltd, arguing the defendant was unable to pay its debts based on a statutory demand. The court, presided over by Valerie Thean J, granted the application on 2 March 2018, finding that the defendant's defenses, including a disputed debt and a superseded settlement agreement, lacked merit. The court ordered costs to be paid to the plaintiff out of the assets of the defendant.
1. Case Overview
1.1 Court
High Court of Singapore1.2 Outcome
Application granted
1.3 Case Type
Insolvency
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Winding up application by Tarkus Interiors against The Working Capitol for inability to pay debts. The court granted the application, finding no substantial dispute.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Tarkus Interiors Pte Ltd | Plaintiff | Corporation | Judgment for Plaintiff | Won | |
| The Working Capitol (Robinson) Pte Ltd | Defendant | Corporation | Application Dismissed | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Valerie Thean | Judge | Yes |
4. Counsels
4. Facts
- The plaintiff applied to wind up the defendant based on a statutory demand served on 25 October 2017.
- The defendant's primary defense was an agreement subsequent to the statutory demand.
- The defendant owed the plaintiff $7,381,657.96 for building and construction work.
- The defendant repaid $2,608,357.93 in February and March 2017.
- The defendant made a partial payment of $200,000 on 4 September 2017.
- The defendant issued a cheque for $3,000,000, but payment was stopped.
- The defendant alleged defective work by the plaintiff, but the court found this claim lacked credibility.
5. Formal Citations
- Tarkus Interiors Pte Ltd v The Working Capitol (Robinson) Pte Ltd, Companies Winding Up No 9 of 2018, [2018] SGHC 105
6. Timeline
| Date | Event |
|---|---|
| Construction Contract signed | |
| Defendant repaid $2,608,357.93 | |
| Defendant repaid $2,608,357.93 | |
| Meeting held to discuss debts | |
| Defendant sent email regarding payment setbacks | |
| Defendant sent email setting out debt repayment plan | |
| Defendant made partial payment of $200,000 | |
| Statutory demand served | |
| Defendant and Plaintiff exchanged emails regarding payment | |
| Plaintiff acknowledged receipt of cheque of $3,000,000 | |
| Plaintiff asked for remaining six cheques | |
| Plaintiff received notice of dishonour for cheque of $3,000,000 | |
| Plaintiff's solicitors claimed breach of settlement agreement | |
| Application granted | |
| Grounds of decision furnished |
7. Legal Issues
- Inability to Pay Debts
- Outcome: The court found that the defendant was unable to pay its debts.
- Category: Substantive
- Related Cases:
- [2015] SGHC 258
- [2013] SGHC 72
- [2004] 1 SLR(R) 434
- Abuse of Process
- Outcome: The court found that the winding-up application was not an abuse of process.
- Category: Procedural
- Related Cases:
- [2009] 2 SLR(R) 949
- Settlement Agreement
- Outcome: The court found that the statutory demand was not superseded by a settlement agreement.
- Category: Substantive
- Related Cases:
- [2016] 2 SLR 875
- [2009] 2 SLR(R) 332
- Solvency
- Outcome: The court found that the defendant had not shown that it was solvent.
- Category: Substantive
- Related Cases:
- [2015] SGHC 258
- [2013] SGHC 72
8. Remedies Sought
- Winding Up Order
- Costs
9. Cause of Actions
- Winding Up
- Breach of Contract
10. Practice Areas
- Commercial Litigation
- Insolvency
- Winding Up
11. Industries
- Construction
- Real Estate
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Pacific Recreation Pte Ltd v S Y Technology Inc | Court of Appeal | Yes | [2008] 2 SLR(R) 491 | Singapore | Cited for the test in determining whether there is a substantial dispute in resisting a winding-up application. |
| Metalform Asia Pte Ltd v Holland Leedon Pte Ltd | High Court | Yes | [2007] 2 SLR(R) 268 | Singapore | Cited for the policy consideration that the commercial viability of a company should not be put in jeopardy by the premature presentation of a winding-up petition against it where there is a bona fide dispute over the debt. |
| BNP Paribas v Jurong Shipyard | High Court | Yes | [2009] 2 SLR(R) 949 | Singapore | Cited for the principle that if the underlying debt is disputed, a winding-up application would be an abuse of process. |
| Bombay Talkies (S) Pte Ltd v UOB Ltd | Court of Appeal | Yes | [2016] 2 SLR 875 | Singapore | Cited for the guidance on whether the debt had been compounded to the reasonable satisfaction of the creditor. |
| Gay Choon Ing v Loh Sze Ti Terence Peter | Court of Appeal | Yes | [2009] 2 SLR(R) 332 | Singapore | Cited for the principles of offer and acceptance in contract law. |
| Latham Scott v Credit Suisse First Boston | High Court | Yes | [2000] 2 SLR(R) 30 | Singapore | Cited for the effect of a condition precedent in a contract. |
| Ramesh Mohandas Nagrani v United Overseas Bank Ltd | High Court | Yes | [2016] 1 SLR 174 | Singapore | Cited as an example where a creditor had successfully reserved his rights. |
| Foakes v Beer | House of Lords | No | (1884) 9 App Cas 605 | England and Wales | Cited for the principle that a promise to accept part payment cannot found a fresh contract to discharge a larger debt for want of consideration. |
| In re Selectmove Ltd | Court of Appeal | No | [1995] 1 WLR 474 | England and Wales | Cited for the principle that a promise to accept part payment cannot found a fresh contract to discharge a larger debt for want of consideration. |
| Export-Import Bank of India v Surya Pharmaceutical (Singapore) Pte Ltd | High Court | Yes | [2015] SGHC 258 | Singapore | Cited for the principle that a debtor may seek to rebut the presumption of insolvency under s 254(2)(a) of the Companies Act by showing that the company was in fact solvent. |
| Starluck Construction Pte Ltd v HSS Engineering Pte Ltd | High Court | No | [2013] SGHC 72 | Singapore | Cited for the principle that a debtor may seek to rebut the presumption of insolvency under s 254(2)(a) of the Companies Act by showing that the company was in fact solvent. |
| Chip Thye Enterprises Pte Ltd (in liquidation) v Phay Gi Mo and others | High Court | Yes | [2004] 1 SLR(R) 434 | Singapore | Cited for the various criteria for determining a company's solvency. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act (Cap 50, 2006 Rev Ed) | Singapore |
| s 254(1)(e) of the Companies Act | Singapore |
| s 254(2)(a) of the Companies Act | Singapore |
| Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Winding Up
- Statutory Demand
- Settlement Agreement
- Insolvency
- Condition Precedent
- Abuse of Process
- Construction Contract
15.2 Keywords
- Winding Up
- Insolvency
- Statutory Demand
- Construction Contract
- Settlement Agreement
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Winding Up | 95 |
| Statutory Demand | 70 |
| Company Law | 60 |
| Contract Law | 50 |
| Building and Construction Contracts | 40 |
| Construction Law | 30 |
16. Subjects
- Insolvency
- Company Law
- Contract Law
- Construction Dispute