Chia Vui Khen Jason v HR Easily Pte Ltd: Winding-Up Application for Unpaid Salary
In the General Division of the High Court of Singapore, Christopher Tan JC dismissed the winding-up application filed by Jason Chia Vui Khen against HR Easily Pte Ltd. The application was based on an alleged unpaid salary of $145,161.30. The court found that there was a substantial and bona fide dispute over a significant portion of the debt and exercised its discretion against granting the winding-up order. The court also found that the claimant failed to prove that the defendant was unable to pay its debts under the cash flow test.
1. Case Overview
1.1 Court
General Division of the High Court1.2 Outcome
Winding-up application dismissed.
1.3 Case Type
Insolvency
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Winding-up application dismissed. The court found a bona fide dispute over the debt and exercised discretion against winding up.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Jason Chia Vui Khen | Claimant | Individual | Application Dismissed | Lost | |
| HR Easily Pte Ltd | Defendant | Corporation | Application Dismissed | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Christopher Tan | Judicial Commissioner | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Toh Yunyuan Selina | Premier Law LLC |
| Lin Yuankai | Premier Law LLC |
| Celine Liow Wan-Ting | Forte Law LLC |
4. Facts
- The Claimant was employed as the Defendant’s Head of Corporate Development.
- The Claimant alleges that the Defendant owed him unpaid salary totalling $145,161.30.
- The Claimant served a statutory demand on the Defendant for $145,161.30.
- The Defendant contends that the Claimant was terminated on 2 September 2021, not 3 January 2022.
- The Defendant paid the Claimant $48,000 in March 2024 for unpaid salary.
- The Defendant deposited $36,000 in escrow as security for the disputed salary.
- The Defendant’s business was acquired by HRIG Pte Ltd in early 2023.
5. Formal Citations
- Chia Vui Khen Jason v HR Easily Pte Ltd, Companies’ Winding Up No 226 of 2023, [2024] SGHC 116
6. Timeline
| Date | Event |
|---|---|
| Claimant commenced working for the Defendant | |
| Claimant alleges he stopped receiving his salary | |
| Defendant terminated Claimant's employment | |
| Claimant served statutory demand on the Defendant | |
| Claimant filed application to wind up the Defendant | |
| Hearing held | |
| Defendant made payments totalling $48,000 to the Claimant | |
| Defendant deposited cash of $36,000 in Defence Counsel’s client account, by way of escrow | |
| Judgment reserved |
7. Legal Issues
- Inability to Pay Debts
- Outcome: The court found that there was a substantial and bona fide dispute over a significant portion of the debt and exercised its discretion against granting the winding-up order. The court also found that the claimant failed to prove that the defendant was unable to pay its debts under the cash flow test.
- Category: Substantive
- Related Cases:
- [2021] 2 SLR 510
- [2009] 2 SLR(R) 949
- [2008] 2 SLR(R) 491
- [2023] 2 SLR 554
- [1991] 1 SLR(R) 126
- [2021] 2 SLR 478
- [1990] 2 SLR(R) 231
- [1972] 1 WLR 523
- Bona Fide Dispute
- Outcome: The court found that the Defendant had raised a substantial and bona fide dispute as to whether the Claimant’s employment was in fact terminated in September 2021.
- Category: Substantive
- Related Cases:
- [2021] 2 SLR 510
- [2009] 2 SLR(R) 949
- [2008] 2 SLR(R) 491
8. Remedies Sought
- Winding-up order
9. Cause of Actions
- Winding-up application
10. Practice Areas
- Commercial Litigation
- Insolvency Law
11. Industries
- Human Resources
- Information Technology
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Diamond Glass Enterprise Pte Ltd v Zhong Kai Construction Co Pte Ltd | High Court | Yes | [2021] 2 SLR 510 | Singapore | Cited for the principle that winding-up applications should not be used to enforce payment of a debt which is bona fide disputed on substantial grounds. |
| BNP Paribas v Jurong Shipyard Pte Ltd | Court of Appeal | Yes | [2009] 2 SLR(R) 949 | Singapore | Cited for the principle that winding-up proceedings should not be used to put pressure on a company into paying a debt when it might not otherwise have to. |
| Pacific Recreation Pte Ltd v S Y Technology Inc and another appeal | Court of Appeal | Yes | [2008] 2 SLR(R) 491 | Singapore | Cited for the standard of proof applied by the courts in determining whether a substantial and bona fide dispute exists as regards the debt undergirding the winding-up application is the “triable issue” standard. |
| Founder Group (Hong Kong) Ltd (in liquidation) v Singapore JHC Co Pte Ltd | Court of Appeal | Yes | [2023] 2 SLR 554 | Singapore | Cited for the principle that the requirement of standing to make an application and the grounds on which the application may be granted are distinct inquiries. |
| Re Inter-Builders Development Pte Ltd | High Court | Yes | [1991] 1 SLR(R) 126 | Singapore | Cited for the position that a statutory demand seeking an amount beyond what was actually due was not necessarily invalid, so long as the amount actually due still exceeded the statutory threshold. |
| 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 principle that security must be to the reasonable satisfaction of the creditor. |
| Ng Tai Tuan and another v Chng Gim Huat Pte Ltd | High Court | Yes | [1990] 2 SLR(R) 231 | Singapore | Cited for the principle that a company which refuses to satisfy that portion of the statutory demand amount which is subject to a substantial and bona fide dispute cannot be said to have neglected to pay, secure or compound, under s 125(2)(a) IRDA. |
| In re Lympne Investments Ltd | Chancery Division | Yes | [1972] 1 WLR 523 | England and Wales | Cited for the principle that the existence of a dispute on substantial grounds as to the existence of any debt defeats the contention that the company has neglected to pay the sum required by the statutory notice. |
| Re G Stonehenge Constructions Pty Ltd and the Companies Act | New South Wales Supreme Court | Yes | (1978) 3 ACLR 941 | Australia | Cited for the principle that the company is to be deemed unable to pay its debts at the date of expiry of the s 222 notice. |
| Deputy Commissioner of Taxation v CYE International Pty Ltd (No 2) | New South Wales Supreme Court | Yes | (1985) 10 ACLR 305 | Australia | Cited for the principle that the company would have been deemed to have been insolvent on 5 December 1984, but without more material on such a significant matter as this it would be difficult to draw the inference and I do not draw the inference that the company was also insolvent on 28 June 1985 when the summons was issued or at today's date. |
| Club Marconi of Bossley Park Social Recreation Sporting Centre Ltd v Rennat Constructions Pty Ltd | New South Wales Supreme Court | Yes | (1980) 4 ACLR 883 | Australia | Cited for the principle that the statutory presumption of insolvency must, I think, continue so long as the company against whom a petition is lodged ‘neglects’ to pay the sum set out in the notice under s 222. |
| DCT v Guy Holdings Pty Ltd | Supreme Court of Tasmania | Yes | (1994) 14 ACSR 580 | Australia | Cited for the principle that I am required to presume that the respondent is insolvent. During the period of three months ending on the day when the application was filed the respondent failed to comply with the statutory demand, so that I am required by s 459C(2) to make that presumption. |
| Mac Plant Services Ltd v Contract Lifting Services (Scotland) Ltd | Court of Session | Yes | [2009] SC 125 | Scotland | Cited for the principle that the use of the present tense in the phrase “is unable to pay its debts” in s 122(1)(f) of the Insolvency Act 1986 (c 45) (UK) indicated that the assessment is to be made as at the date of the hearing of the application. |
| Song Jianbo v Sunmax Global Capital Fund 1 Pte Ltd | High Court | Yes | [2022] SGHC 229 | Singapore | Cited for the principle that the whole point of a deeming provision is to establish a factual paradigm upon the satisfaction of certain factual parameters. |
| BW Umuroa Pte Ltd v Tamarind Resources Pte Ltd | High Court | Yes | [2020] 4 SLR 1294 | Singapore | Cited for the principle that if the defendant is genuinely solvent as it claims, it should have satisfied the statutory demand. |
| Pac-Asian Services Pte Ltd v European Asian Bank AG | Court of Appeal | Yes | [1987] SLR(R) 6 | Singapore | Cited for the principle that the presumption that the company is unable to pay its debts does not appear to be a rebuttable one. |
| Tarkus Interiors Pte Ltd v The Working Capitol (Robinson) Pte Ltd | High Court | Yes | [2018] SGHC 105 | Singapore | Cited for the principle that once the deeming provision in limb (a) of s 125(2) IRDA has been engaged, it is still open to a company to rebut the presumption (that it is unable to pay its debts) by showing that it was solvent. |
| Adcrop Pte Ltd v Gokul Vegetarian Restaurant and Cafe Pte Ltd (Rajeswary d/o Sinan and another, non-parties) | High Court | Yes | [2023] 5 SLR 1435 | Singapore | Cited for the principle that the court also retains a general residual discretion to consider all other relevant factors when deciding whether a company should be wound up, even if the statutory grounds for doing so have been technically established. |
| Re a company | High Court | Yes | [1984] 3 All ER 78 | England and Wales | Cited for the principle that the balance of £10,201.4337 was bona fide disputed on substantial grounds and proceeded to dismiss the winding-up petition, even though the company had not paid that balance. |
| Re Ascentra Holdings, Inc (in official liquidation) and others (SPGK Pte Ltd, non-party) | High Court | Yes | [2023] SGHC 82 | Singapore | Cited for the principle that limb (c) of s 125(2) IRDA, unlike limb (a), is not truly a deeming provision. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Insolvency, Restructuring and Dissolution Act 2018 | Singapore |
| s 125(2)(a) of the Insolvency, Restructuring and Dissolution Act 2018 | Singapore |
| s 125(1)(e) IRDA | Singapore |
| s 125(2)(c) IRDA | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Winding-up
- Statutory demand
- Bona fide dispute
- Insolvency
- Cash flow test
- Deeming provision
- Escrow
- Retrenchment
- Unpaid salary
15.2 Keywords
- Winding-up application
- Insolvency
- Unpaid salary
- Statutory demand
- Bona fide dispute
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Insolvency Law | 95 |
| Winding Up | 95 |
| Termination | 60 |
| Breach of Contract | 40 |
| Debt Recovery | 30 |
| Judgments and Orders | 20 |
16. Subjects
- Insolvency Law
- Winding up
- Companies Law