DDP & DDQ v DDR & Registrar of Titles: Undervalue Transaction & Insolvency Law
DDP and DDQ, as joint trustees of [B]'s bankruptcy estate, applied to the General Division of the High Court of Singapore on 14 August 2023, seeking to set aside a property transfer by [B] to his son, DDR, as an undervalue transaction under the Insolvency, Restructuring and Dissolution Act 2018. The court, presided over by Justice Goh Yihan, granted the application, ordering the transfer to be set aside and the property vested in [B]'s bankruptcy estate. The Registrar of Titles was directed to rectify the land register accordingly.
1. Case Overview
1.1 Court
General Division of the High Court1.2 Outcome
Application granted in part.
1.3 Case Type
Insolvency
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Trustees sought to set aside a property transfer as an undervalue transaction under IRDA. The court granted the order, vesting ownership in the bankruptcy estate.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| DDP | Claimant | Individual | Application granted in part | Partial | Lin Weiwen Moses, Manvindar Kaur Sethi d/o Sarwan Singh |
| DDQ | Claimant | Individual | Application granted in part | Partial | Lin Weiwen Moses, Manvindar Kaur Sethi d/o Sarwan Singh |
| DDR | Defendant | Individual | Lost | Lost | Loo Chieh Ling Kate, Jerelyn Tay Yee Ying |
| The Registrar of Titles | Defendant | Government Agency | Neutral | Neutral |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Goh Yihan | Judge of the High Court | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Lin Weiwen Moses | Shook Lin & Bok LLP |
| Manvindar Kaur Sethi d/o Sarwan Singh | Shook Lin & Bok LLP |
| Loo Chieh Ling Kate | Ling Law Corporation |
| Jerelyn Tay Yee Ying | Ling Law Corporation |
4. Facts
- [B] transferred beneficial interest in property to his son, the first defendant, via a Trust Deed.
- The Trust Deed stated that the first defendant did not pay for the purchase of the property.
- The transfer occurred within three years before the bankruptcy application was filed.
- [B] was presumed insolvent at the time of the transfer because the first defendant is his son.
- The plaintiffs obtained summary judgment against [B] for the investors’ assets.
- The plaintiffs served a statutory demand on [B] demanding repayment of the sums awarded in the summary judgment.
- The High Court ordered that [B] be adjudged a bankrupt.
5. Formal Citations
- DDP (in his capacity as the joint and several trustees of the bankruptcy estate of [B]) and another v DDR (a minor) and another, Originating Application No 657 of 2023, [2023] SGHC 285
6. Timeline
| Date | Event |
|---|---|
| Declaration of Trust dated | |
| Contract for purchase of Property signed | |
| Legal title in Property transferred to [B] | |
| Bankruptcy application filed | |
| [C] filed an affidavit | |
| Originating Application heard | |
| Judgment reserved |
7. Legal Issues
- Whether the transfer of beneficial interest in the property was a transaction at an undervalue
- Outcome: The court held that the transfer was a transaction at an undervalue under s 361(3)(a) of the IRDA because it was a gift and [B] received no consideration.
- Category: Substantive
- Related Cases:
- [2022] 2 SLR 158
- Whether [B] was insolvent at the time of the transfer
- Outcome: The court held that [B] was presumed to be insolvent under s 363(3) of the IRDA because the first defendant is an associate of [B], and the first defendant did not disprove [B]'s insolvency.
- Category: Substantive
- Related Cases:
- [2023] 3 SLR 590
- Whether the transfer was made with the intent to defraud creditors
- Outcome: The court made no order as to this issue due to the absence of full arguments from both sides.
- Category: Substantive
8. Remedies Sought
- Declaration that the transfer is an undervalue transaction
- Declaration that the transfer was made with intent to defraud creditors
- Order to set aside the Trust Deed
- Order to vest beneficial ownership of the Property in the bankruptcy estate of [B]
- Order to direct the Registrar of Titles to rectify the land register
9. Cause of Actions
- Avoidance of transaction at undervalue
- Transaction defrauding creditors
10. Practice Areas
- Insolvency Litigation
11. Industries
- No industries specified
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Rothstar Group Ltd v Leow Quek Shiong and other appeals | Court of Appeal | Yes | [2022] 2 SLR 158 | Singapore | Cited for the principle that the value of consideration received must be significantly less than the value of the consideration provided for a transaction to be at an undervalue. |
| Sim Guan Seng and others v One Organisation Ltd and others | High Court | Yes | [2023] 3 SLR 590 | Singapore | Cited for the principle that the burden lies on the transferee to disprove the transferor's insolvency at the time of the transaction. |
| Christie, Hamish Alexander (as private trustee in bankruptcy of Tan Boon Kian) v Tan Boon Kian and others | High Court | Yes | [2021] 4 SLR 809 | Singapore | Cited for the principle that the court has discretion not to make an order restoring the position to what it would have been had the bankrupt individual not entered into the transaction, but will usually make the order if all the statutory requirements are satisfied. |
| BAT Industries plc and others v Sequana SA | English Court of Appeal | Yes | [2019] Bus LR 2178 | England and Wales | Cited for the principle that it is sufficient to demonstrate that the debtor subjectively intended to put assets beyond the reach of actual or potential creditors. |
| Inland Revenue Commissioners v Hashmi | English Court of Appeal | Yes | [2002] 2 BCLC 489 | England and Wales | Cited for the principle that the purpose of putting assets beyond the reach of a potential creditor does not have to be the dominant purpose for the transaction to be caught under s 423, and it sufficed if it was a substantial purpose. |
| 4Eng Ltd v Harper and others | English High Court | Yes | [2010] 1 BCLC 176 | England and Wales | Cited for the principle that the nature of any order and the extent of the relief granted by the court should take into account the mental state of the transferee, and the degree of their involvement in the fraudulent scheme of the debtor/transferor to put assets out of the reach of his creditors. |
| In re Fowlds (A Bankrupt) Bucknall and another v Wilson | English High Court | Yes | [2022] 1 WLR 61 | England and Wales | Cited for the principle that it may be more appropriate to carry out a balancing exercise in s 423 cases, which is between the interests of the creditors or victims of the transferor on the one hand and the transferee on the other. |
13. Applicable Rules
| Rule Name |
|---|
| Order 4, Rule 7 of the Rules of Court 2021 |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Insolvency, Restructuring and Dissolution Act 2018 | Singapore |
| Sections 361 of the Insolvency, Restructuring and Dissolution Act 2018 | Singapore |
| s 361(3) of the IRDA | Singapore |
| Section 363(3) of the IRDA | Singapore |
| Section 438 of the IRDA | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Transaction at undervalue
- Insolvency
- Trust Deed
- Beneficial interest
- Bankruptcy estate
- Insolvency, Restructuring and Dissolution Act 2018
- Transfer Instrument
- Declaration of Trust
15.2 Keywords
- Insolvency
- Undervalue Transaction
- Bankruptcy
- Trust
- Property Transfer
16. Subjects
- Insolvency
- Property Law
- Trusts
17. Areas of Law
- Insolvency Law
- Avoidance of transactions
- Transactions at an undervalue
- Transactions defrauding creditors