Song Jianbo v Sunmax Global Capital Fund 1 Pte Ltd: Winding Up Order for Inability to Pay Debts
The claimant, Song Jianbo, applied for a winding up order against the defendant, Sunmax Global Capital Fund 1 Pte Ltd, in the General Division of the High Court of Singapore. The application was based on the defendant's inability to pay its debts under s 125(1)(e) of the Insolvency, Restructuring and Dissolution Act 2018. Goh Yihan JC granted the winding up order on 5 August 2022, and these grounds of decision provide further explanation. The court found that the defendant had failed to pay a statutory demand and was cash flow insolvent, thus justifying the winding up order.
1. Case Overview
1.1 Court
General Division of the High Court of the Republic of Singapore1.2 Outcome
Winding up order granted.
1.3 Case Type
Insolvency
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Winding up application granted against Sunmax Global Capital Fund 1 Pte Ltd due to inability to pay debts under s 125(1)(e) of the IRDA.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Official Receiver | Other | Government Agency | Benjamin Yim of Ministry of Law (IPTO) | ||
| Xia Zheng | Other | Individual | |||
| Li Hua | Other | Individual | |||
| Song Jianbo | Claimant | Individual | Winding up order granted | Won | |
| Sunmax Global Capital Fund 1 Pte Ltd | Defendant | Corporation | Winding up order granted | Lost | |
| Tanoto | Other | Individual |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Goh Yihan | Judicial Commissioner | Yes |
4. Counsels
4. Facts
- The claimant is a judgment creditor of the defendant.
- The claimant had been granted judgment against the defendant and Mr Li Hua in High Court Suit No 427 of 2019.
- The outstanding debt at the time of the issuance of the statutory demand on 6 April 2022 was S$1,320,780.15.
- The defendant did not dispute the debt or the validity of the statutory demand.
- The claimant relied on s 125(2)(a) of the IRDA, arguing that the defendant had not paid any part of the debt demanded in the statutory demand.
- The claimant also relied on s 125(2)(c) of the IRDA, arguing that the defendant was cash flow insolvent.
- The defendant argued that it was solvent based on pending legal actions and potential recovery of assets.
5. Formal Citations
- Song Jianbo v Sunmax Global Capital Fund 1 Pte Ltd, Companies’ Winding Up No 116 of 2022, [2022] SGHC 229
6. Timeline
| Date | Event |
|---|---|
| Insolvency, Restructuring and Dissolution Act 2018 enacted | |
| High Court Suit No 427 filed | |
| Statutory demand issued | |
| Affidavit of Song Jianbo filed | |
| Claimant's Skeletal Submissions dated | |
| Owe Kok Liang’s 2nd Affidavit dated | |
| Defendant’s Written Submissions dated | |
| Hearing held; winding up order granted | |
| Defendant’s solicitors requested further arguments | |
| Defendant filed a notice of appeal | |
| Grounds of Decision issued |
7. Legal Issues
- Inability to Pay Debts
- Outcome: The court found the defendant unable to pay its debts under s 125(1)(e) of the IRDA, based on both s 125(2)(a) and s 125(2)(c).
- Category: Substantive
- Related Cases:
- [2021] 2 SLR 478
- [2009] 2 SLR(R) 949
8. Remedies Sought
- Winding up order
9. Cause of Actions
- Winding up
10. Practice Areas
- Insolvency
- Winding up
11. Industries
- No industries specified
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Sun Electric Power Pte Ltd v RCMA Asia Pte Ltd (formerly known as Tong Teik Pte Ltd) | Court of Appeal | Yes | [2021] 2 SLR 478 | Singapore | Cited for the proposition that the cash flow test is the sole test of solvency. |
| BNP Paribas v Jurong Shipyard Pte Ltd | Court of Appeal | Yes | [2009] 2 SLR(R) 949 | Singapore | Cited for the principle that a creditor is prima facie entitled to a winding-up order ex debito justitiae where a company is unable or deemed to be unable to pay its debts. |
| Xia Zheng v Song Jianbo and another | High Court | Yes | [2022] SGHC 124 | Singapore | Cited in relation to the setting aside of a writ of seizure and sale. |
| BW Umuroa Pte Ltd v Tamarind Resources Pte Ltd | High Court | Yes | [2020] 4 SLR 1294 | Singapore | Cited for the principle that it is no defence to a valid statutory demand for the defendant to say that it is solvent, but that it refuses to pay, compound or secure the debt. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Insolvency, Restructuring and Dissolution Act 2018 | Singapore |
| Section 125(1)(e) of the Insolvency, Restructuring and Dissolution Act 2018 | Singapore |
| Section 125(2) of the Insolvency, Restructuring and Dissolution Act 2018 | Singapore |
| Section 125(2)(a) of the Insolvency, Restructuring and Dissolution Act 2018 | Singapore |
| Section 125(2)(c) of the Insolvency, Restructuring and Dissolution Act 2018 | Singapore |
| Section 144(1) of the IRDA | Singapore |
| Section 254(2)(a) of the Companies Act (Cap 50, 2006 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Winding up
- Insolvency
- Statutory demand
- Cash flow insolvency
- Deeming provision
- Ex debito justitiae
15.2 Keywords
- Winding up
- Insolvency
- Statutory demand
- IRDA
- Singapore
- Company Law
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Winding Up | 95 |
| Bankruptcy | 75 |
| Company Law | 60 |
| Civil Procedure | 40 |
| Debt Recovery | 30 |
| Contract Law | 20 |
16. Subjects
- Insolvency Law
- Winding up
- Companies Law