Tonghuai @ Nanhang Pte Ltd v Teo Fook Keong: Application for Leave to Commence Proceedings Against Bankrupt under IRDA
In the case of Tonghuai @ Nanhang Pte Ltd v Teo Fook Keong, the General Division of the High Court of Singapore heard an application by Tonghuai @ Nanhang Pte Ltd for permission to commence proceedings against Teo Fook Keong, a bankrupt, under Section 327(1)(c)(ii) of the Insolvency, Restructuring and Dissolution Act 2018. The application sought to confirm the validity of a caveat lodged over a property. Goh Yihan JC allowed the application, finding that the relevant factors favored granting permission, including the timely application, the nature of the action, the lack of prejudice to other creditors, and the absence of objection from the private trustees. The court applied the standard of 'a serious question to be tried' in assessing the merits of the claim.
1. Case Overview
1.1 Court
General Division of the High Court of the Republic of Singapore1.2 Outcome
Application allowed.
1.3 Case Type
Insolvency
1.4 Judgment Type
Ex Tempore Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Singapore court allows Tonghuai @ Nanhang Pte Ltd to commence proceedings against bankrupt Teo Fook Keong, addressing the standard for assessing claim merits.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Tonghuai @ Nanhang Pte Ltd | Applicant | Corporation | Application Allowed | Won | Naidu Priyalatha |
| Teo Fook Keong | Respondent | Individual | Application Allowed | Lost | Wong Wan Chee |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Goh Yihan | Judicial Commissioner | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Naidu Priyalatha | Advocatus Law LLP |
| Wong Wan Chee | Rev Law LLC |
4. Facts
- Applicant entered into three loan agreements with V Spec Engineering & Supplies Pte Ltd.
- The loans were secured by guarantees from the respondent, Mdm Wong, and Mr. Teo.
- Respondent and Mdm Wong authorized the applicant to lodge a caveat on the Property.
- Applicant lodged a Caveat over the Property on 31 October 2022.
- Private Trustees of the respondent's bankruptcy estate claimed the Caveat was wrongfully lodged.
- Singapore Land Authority issued a Notice to the applicant to cancel the Caveat.
- Respondent became a bankrupt as of 5 January 2023.
5. Formal Citations
- Tonghuai @ Nanhang Pte Ltd v Teo Fook Keong, Originating Application No 328 of 2023, [2023] SGHC 134
6. Timeline
| Date | Event |
|---|---|
| Insolvency, Restructuring and Dissolution Act 2018 enacted | |
| First Loan Agreement entered into | |
| Second Loan Agreement entered into | |
| Third Loan Agreement entered into | |
| Caveat lodged over the Property | |
| Teo Fook Keong became a bankrupt | |
| Private Trustees demanded withdrawal of Caveat | |
| Applicant's solicitors replied regarding Caveat withdrawal | |
| Application to Cancel Vexatious Caveat made to Singapore Land Authority | |
| Singapore Land Authority issued a Notice to the applicant | |
| Judgment issued |
7. Legal Issues
- Leave to Commence Proceedings Against Bankrupt
- Outcome: The court granted leave to commence proceedings.
- Category: Procedural
- Related Cases:
- [2022] SGHC 271
- [2004] 1 SLR(R) 671
- Caveatable Interest
- Outcome: The court found that the applicant's position, that a contractual interest in the sale proceeds of property is a caveatable interest, is not an unarguable one.
- Category: Substantive
- Related Cases:
- [2015] 1 SLR 601
8. Remedies Sought
- Confirmation of Validity of Caveat
9. Cause of Actions
- Validity of Caveat
10. Practice Areas
- Insolvency Litigation
- Bankruptcy Proceedings
11. Industries
- No industries specified
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Wang Aifeng v Sunmax Global Capital Fund 1 Pte Ltd and another | High Court | Yes | [2022] SGHC 271 | Singapore | Cited for relevant factors that a court should consider in the exercise of its discretion whether to grant permission for the continuation or commencement of proceedings against a bankrupt under s 327(1)(c)(ii) of the IRDA. |
| Salbiah bte Adnan v Micro Credit Pte Ltd | High Court | Yes | [2015] 1 SLR 601 | Singapore | Cited for the rule that a mere contractual interest in the sale proceeds of property cannot be a caveatable interest. |
| Korea Asset Management Corp v Daewoo Singapore Pte Ltd (in liquidation) | High Court | Yes | [2004] 1 SLR(R) 671 | Singapore | Cited for the applicable standard is that of “a serious question to be tried”, similar to that required for interlocutory relief. |
| Bristol & West Building Society v Trustee of the property of Back and another (bankrupts) | English High Court | Yes | [1998] 1 BCLC 485 | England and Wales | Cited for the principle that permission ought not to be given where there is no likelihood of the claim being satisfied in any way. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Section 327(1)(c)(ii) of the Insolvency, Restructuring and Dissolution Act 2018 | Singapore |
| Section 127(2) of the Land Titles Act 1993 | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Insolvency, Restructuring and Dissolution Act 2018
- Caveat
- Authorisation to Caveat
- Bankruptcy
- Private Trustees
- Caveatable Interest
- Loan Agreement
- Guarantee
15.2 Keywords
- Insolvency
- Bankruptcy
- Caveat
- Singapore
- High Court
- IRDA
- Leave to Commence Proceedings
16. Subjects
- Bankruptcy
- Insolvency
- Civil Procedure
- Real Property Law
17. Areas of Law
- Insolvency Law
- Bankruptcy Law
- Civil Procedure