Ley Choon Constructions v Yew San Construction: Winding Up Application for Unsatisfied Judgment Debt

Ley Choon Constructions and Engineering Pte Ltd applied to the High Court of Singapore to wind up Yew San Construction Pte Ltd based on an unsatisfied judgment debt. Choo Han Teck J granted the winding up order, finding Yew San Construction Pte Ltd unable to pay its debts and rejecting arguments for adjournment pending appeal.

1. Case Overview

1.1 Court

High Court of the Republic of Singapore

1.2 Outcome

Winding up order granted against the defendant.

1.3 Case Type

Insolvency

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Winding up application based on an unsatisfied judgment debt. The court ordered Yew San Construction Pte Ltd to be wound up.

1.7 Decision Date

25 May 2020

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Ley Choon Constructions and Engineering Pte Ltd	Plaintiff	Corporation	Winding up order granted	Won	Ng Jie Zhen Amy of Chelliah & Kiang LLC Ravindran Chelliah of Chelliah & Kiang LLC
Yew San Construction Pte Ltd	Defendant	Corporation	Winding up order made	Lost	Yam Wern-Jhien of Rajah & Tann Singapore LLP Bethel Chan Ruiyi of Rajah & Tann Singapore LLP

3. Judges

Judge Name	Title	Delivered Judgment
Choo Han Teck	Judge	Yes

4. Counsels

Counsel Name	Organization
Ng Jie Zhen Amy	Chelliah & Kiang LLC
Ravindran Chelliah	Chelliah & Kiang LLC
Yam Wern-Jhien	Rajah & Tann Singapore LLP
Bethel Chan Ruiyi	Rajah & Tann Singapore LLP

4. Facts

The plaintiff obtained judgment against the defendant for $663,246.73 plus interest.
The plaintiff served a statutory demand on the defendant for the judgment sum plus interest.
The defendant failed to satisfy the statutory demand.
The defendant's application for a stay of execution was conditional on payment into court, which the defendant failed to do.
The defendant admitted it was unable to pay the judgment sum at the time of the hearing.
The defendant's balance sheet showed current assets exceeding current liabilities, but the court found it to be cash flow insolvent.
The defendant argued for an adjournment pending appeal of the judgment debt.

5. Formal Citations

Ley Choon Constructions and Engineering Pte Ltd v Yew San Construction Pte Ltd, Companies Winding Up No 46 of 2020, [2020] SGHC 108

6. Timeline

Date	Event
2019-12-05	Judgment dated in Suit No 316 of 2015 obtained by the plaintiff against the defendant.
2020-01-08	Plaintiff served a statutory demand on the defendant.
2020-01-23	Negotiations between parties regarding the statutory demand commenced.
2020-02-04	Negotiations between parties regarding the statutory demand failed.
2020-02-07	Plaintiff filed the winding up application.
2020-02-21	Defendant filed an affidavit to oppose the application.
2020-02-28	First hearing of the winding up application; adjournment granted.
2020-03-06	Second hearing of the winding up application; further adjournment granted.
2020-03-19	Hearing for the defendant’s application for a stay of execution of the Judgment.
2020-04-03	Defendant filed a notice to change its solicitors.
2020-04-06	Final hearing for the winding up application.
2020-05-26	Judgment reserved.

7. Legal Issues

Insolvency
- Outcome: The court found the defendant to be unable to pay its debts and ordered it to be wound up.
- Category: Substantive
- Sub-Issues:
  - Cash flow insolvency
  - Balance sheet insolvency
  - Inability to pay debts as they fall due
- Related Cases:
  - [2009] 2 SLR(R) 949
  - [2007] 2 SLR(R) 268
Defective Statutory Demand
- Outcome: The court held that the statutory demand was not defective, even though it did not state all three options available to the defendant.
- Category: Procedural
- Sub-Issues:
  - Omission of alternative options in statutory demand
- Related Cases:
  - [2009] 2 SLR(R) 949
Adjournment of Winding Up Application
- Outcome: The court declined to grant a further adjournment of the winding up application.
- Category: Procedural
- Sub-Issues:
  - Pending appeals against judgment debt
  - Commercial viability of the company
  - Impact on employees and public interest
- Related Cases:
  - [2009] 2 SLR(R) 949
  - [2007] 2 SLR(R) 268

8. Remedies Sought

Winding up order
Appointment of liquidators

9. Cause of Actions

Winding up application under s 254(1)(e) of the Companies Act

10. Practice Areas

Winding Up
Commercial Litigation

11. Industries

Construction

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
BNP Paribas v Jurong Shipyard Pte Ltd	Court of Appeal	Yes	[2009] 2 SLR(R) 949	Singapore	Cited regarding the requirements of a statutory demand and the court's discretion in winding up applications.
United Overseas Bank Ltd v Bombay Talkies (S) Pte Ltd	High Court	Yes	[2015] SGHC 142	Singapore	Cited regarding the requirements of a statutory demand.
Metalform Asia Pte Ltd v Holland Leedon Pte Ltd	Court of Appeal	Yes	[2007] 2 SLR(R) 268	Singapore	Cited for the general rule that a creditor is prima facie entitled to a winding up order ex debito justitiae when a debtor company is unable to pay its debts.

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
s 392 of the Companies Act	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Winding up
Statutory demand
Judgment debt
Insolvency
Cash flow insolvency
Balance sheet insolvency
Adjournment
Stay of execution
Commercial viability

15.2 Keywords

Winding up
Insolvency
Construction
Judgment debt
Singapore

17. Areas of Law

Area Name	Relevance Score
Winding Up	95
Company Law	60
Bankruptcy	30
Civil Procedure	20

16. Subjects

Insolvency
Company Law