Aathar Ah Kong Andrew v OUE Lippo: Revocation of Voluntary Arrangement for Lack of Candour and Material Irregularities
Aathar Ah Kong Andrew appealed against the decision to revoke his proposed third voluntary arrangement (3rd VA). OUE Lippo Healthcare Limited (OUELH) opposed the 3rd VA, arguing material irregularities occurred during the creditors’ meeting. The High Court dismissed Aathar's appeal, finding material irregularities in the nominee's inclusion of claims from Indonesian creditors and Aathar's lack of candour.
1. Case Overview
1.1 Court
High Court of the Republic of Singapore1.2 Outcome
Appeal Dismissed
1.3 Case Type
Insolvency
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Appeal to revoke a third voluntary arrangement due to material irregularities and lack of candour. The court dismissed the appeal.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Aathar Ah Kong Andrew | Appellant | Individual | Appeal Dismissed | Lost | |
| OUE Lippo Healthcare Limited | Respondent | Corporation | Appeal Dismissed | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Audrey Lim | Judge | Yes |
4. Counsels
4. Facts
- Aathar proposed a third voluntary arrangement (3rd VA) to distribute $2.5 million among liabilities of over $596 million.
- The 3rd VA was opposed by OUE Lippo Healthcare Limited (OUELH).
- The nominee, Mr. Andre Arul, admitted claims by Indonesian creditors (Indon Entities) based on Share Charge and Guarantee Deeds (SCG Deeds).
- OUELH challenged the inclusion of the Indon Entities’ claims, alleging material irregularities.
- The AR found that the Nominee relied on documents adduced after the Creditors’ Meeting to justify his admission and adjudication of the Indon Entities’ claims.
- The AR revoked the approval given at the Creditors’ Meeting as the votes pertaining to the $65 million should not have been counted.
- Aathar appealed against the AR’s decision pertaining to the Indon Entities’ claims.
5. Formal Citations
- Re Aathar Ah Kong Andrew, Originating Summons No 8 of 2019 (Registrar’s Appeal No 310 of 2019), [2020] SGHC 173
6. Timeline
| Date | Event |
|---|---|
| Aathar applied for the first voluntary arrangement | |
| Aathar filed a second application for voluntary arrangement | |
| Aathar filed his third voluntary arrangement application | |
| Aathar was granted an interim voluntary arrangement | |
| AR allowed the creditors’ meeting to be called | |
| Nominee issued a notice of creditors’ meeting | |
| OUELH’s lawyers provided an updated notice of claim to the Nominee | |
| OUELH informed the Nominee of OUELH’s concerns on the veracity of Golden Cliff’s and the Indonesian creditors’ claims | |
| Creditors’ Meeting was held | |
| Nominee's Chairman’s Report was dated | |
| Hearing date | |
| Hearing date | |
| Hearing date | |
| Hearing date | |
| Judgment reserved |
7. Legal Issues
- Material Irregularities in Creditors’ Meeting
- Outcome: The court found that material irregularities existed due to the improper inclusion of the Indon Entities’ claims and the Nominee’s failure to properly scrutinize those claims.
- Category: Procedural
- Sub-Issues:
- Improper inclusion of claims for voting purposes
- Failure to properly scrutinize claims
- Breach of duty of independence and scrutiny by nominee
- Duty of Candour and Full Disclosure
- Outcome: The court found that Aathar failed to discharge his duty of candour and full disclosure by not providing supporting documents for the Indon Entities’ claims and being less than honest about the funding from PT Cahaya.
- Category: Substantive
- Sub-Issues:
- Failure to provide supporting documents
- Incomplete disclosure of financial information
- Interpretation of Share Charge and Guarantee Deeds
- Outcome: The court interpreted the SCG Deeds to mean that REL's obligation was to provide guarantees to the Creditors, not to the Indon Entities, and that Aathar's obligation was triggered only if REL defaulted on its guarantee obligation.
- Category: Substantive
- Sub-Issues:
- Obligations of guarantor
- Conditions for triggering guarantee
- Identification of creditor
- Admissibility of Post-Meeting Evidence
- Outcome: The court held that post-meeting evidence could be considered to determine if a claim is established and the quantum of the claim, but its relevance depends on the nature of the evidence and the purpose for adducing it.
- Category: Procedural
- Sub-Issues:
- Use of evidence to justify nominee's adjudication
- Relevance of evidence to nominee's state of mind
8. Remedies Sought
- Reversal of Revocation Order
- Approval of Voluntary Arrangement
9. Cause of Actions
- Revocation of Voluntary Arrangement
10. Practice Areas
- Insolvency
- Bankruptcy
- Voluntary Arrangement
11. Industries
- No industries specified
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Aathar Ah Kong Andrew v CIMB Securities (Singapore) Pte Ltd and other appeals and another matter | Court of Appeal | Yes | [2019] 2 SLR 164 | Singapore | Cited as the Court of Appeal's decision on the second voluntary arrangement, highlighting the requirements for candour, full disclosure, objectivity, and scrutiny in voluntary arrangements. |
| MCH International Pte Ltd and others v YG Group Pte Ltd and others and other appeals | Court of Appeal | Yes | [2019] 2 SLR 837 | Singapore | Cited regarding the admissibility and relevance of evidence of subsequent conduct in contractual interpretation. |
| Centre for Laser and Aesthetic Medicine Pte Ltd v GPK Clinic (Orchard) Pte Ltd and others and another appeal | Court of Appeal | Yes | [2018] 1 SLR 180 | Singapore | Cited regarding the use of extraneous evidence to interpret contracts. |
| American Home Assurance Co v Hong Lam Marine Pte Ltd | High Court | Yes | [1999] 2 SLR(R) 992 | Singapore | Cited for the principle that there is no liability on the guarantor's part if the underlying obligation ceases to exist. |
| Anson v Anson | N/A | Yes | [1953] 1 WLR 573 | N/A | Cited for the principle that a guarantor has a right to be indemnified or reimbursed by the principal debtor after the guarantor makes payment to the creditor. |
| Autocal Holdings Ltd v Jeffery | High Court of Justice | Yes | [2017] EWHC 807 (Ch) | England and Wales | Cited for the principle that a guarantor has a right to be indemnified or reimbursed by the principal debtor after the guarantor makes payment to the creditor. |
| Craythorne v Swinburne | N/A | Yes | (1807) 14 Ves Jun 160 | N/A | Cited for the principle that the principal debtor cannot seek contribution from the guarantor for the paid debt. |
| Re a Company (No 4539 of 1993) | N/A | Yes | [1995] 1 BCLC 459 | N/A | Cited for the principle that where a claim is marked 'objected to', the court may determine, on a balance of probabilities, whether the claim is established and the amount of such claim. |
| Re a debtor (No 574 of 1995) | N/A | Yes | [1998] BCLC 124 | N/A | Cited for the principle that the court is not confined to the evidence that was before the chairman but was entitled to consider further admissible evidence placed before it. |
| Revenue and Customs Commissioners v Maxwell | Court of Appeal | Yes | [2010] EWCA Civ 1379 | England and Wales | Cited for the principle that the court was not restricted to the evidence that was available as at that date for the purposes of ascertaining the figures of the debt. |
| Andrew Fender v The Commissioners of Inland Revenue | High Court | Yes | [2003] EWHC 3543 (Ch) | England and Wales | Cited for the principle that liability does not arise under a guarantee until the principal obligor has made default. |
| The Enterprise Fund III Ltd and others v OUE Lippo Healthcare Ltd (formerly known as International Healthway Corp Ltd) | Court of Appeal | Yes | [2019] 2 SLR 524 | Singapore | Cited regarding the Court of Appeal upholding the High Court’s finding that the Standby Facility was void. |
13. Applicable Rules
| Rule Name |
|---|
| Bankruptcy Rules (Cap 20, R 1, 2006 Rev Ed) r 84(6) |
| Bankruptcy Rules (Cap 20, R 1, 2006 Rev Ed) r 84(2) |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Bankruptcy Act (Cap. 20) | Singapore |
| Bankruptcy Act (Cap 20, 2009 Rev Ed) s 54(1) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Voluntary Arrangement
- Material Irregularity
- Creditors’ Meeting
- Share Charge and Guarantee Deeds
- Nominee
- Duty of Candour
- Duty of Scrutiny
- Indonesian Creditors
- Objected To
15.2 Keywords
- bankruptcy
- insolvency
- voluntary arrangement
- creditors
- material irregularity
- Singapore
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Bankruptcy | 90 |
| Insolvency Law | 90 |
| Voluntary Arrangement | 85 |
| Civil Procedure | 40 |
| Evidence | 30 |
| Contract Law | 30 |
| Commercial Disputes | 20 |
16. Subjects
- Bankruptcy
- Insolvency
- Voluntary Arrangements
- Civil Procedure