JTrust Asia v Group Lease Holdings: Winding Up Application for Inability to Pay Debts
In the General Division of the High Court of Singapore, JTrust Asia Pte Ltd initiated a winding up application against Group Lease Holdings Pte Ltd (GLH) due to its inability to pay a judgment debt. GLH and its sole shareholder, Group Lease Public Company Ltd (GL Thailand), opposed the application, alleging abuse of process and bias on the part of the nominated liquidator, Mr. Cosimo Borrelli. Justice Vinodh Coomaraswamy rejected these submissions, finding GLH unable to pay its debts under the Insolvency, Restructuring and Dissolution Act 2018. The court ordered GLH to be wound up and appointed Mr. Borrelli as the liquidator.
1. Case Overview
1.1 Court
General Division of the High Court of the Republic of Singapore1.2 Outcome
Ordered that Group Lease Holdings Pte Ltd be wound up and Mr Borrelli be appointed as its liquidator.
1.3 Case Type
Insolvency
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Singapore court orders Group Lease Holdings wound up due to inability to pay debts, rejecting abuse of process claims and bias allegations.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| JTrust Asia Pte Ltd | Claimant | Corporation | Winding up order granted | Won | Celeste Ang, Emmanuel Chua, Yiu Kai Tai, Yap Yong Li, Tan Jia Xin |
| Group Lease Holdings Pte Ltd | Defendant | Corporation | Winding up order granted | Lost | Debby Lim, Chia Huai Yuan, Melvin See, V Santhosh, Philip Teh |
| Group Lease Public Company Limited | Non-party | Corporation | Application dismissed | Lost | Chelva Rajah, Moiz Haider Sithawalla, Thaddeus Tan, Clara Ng, Clement Tan, Luis Duhart, Colin Tan, Dupinderjeet Kaur |
| Cosimo Borrelli | Non-party | Individual | Appointment as liquidator | Neutral | Suresh Nair, Bryan Tan, Brendan Cheow |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Vinodh Coomaraswamy | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Celeste Ang | Wong & Leow LLC |
| Emmanuel Chua | Wong & Leow LLC |
| Yiu Kai Tai | Wong & Leow LLC |
| Yap Yong Li | Wong & Leow LLC |
| Tan Jia Xin | Wong & Leow LLC |
| Debby Lim | Dentons Rodyk & Davidson LLP |
| Chia Huai Yuan | Dentons Rodyk & Davidson LLP |
| Melvin See | Dentons Rodyk & Davidson LLP |
| V Santhosh | Dentons Rodyk & Davidson LLP |
| Philip Teh | Dentons Rodyk & Davidson LLP |
| Suresh Nair | PK Wong & Nair LLC |
| Bryan Tan | PK Wong & Nair LLC |
| Brendan Cheow | PK Wong & Nair LLC |
| Chelva Rajah | Tan Rajah & Cheah |
| Moiz Haider Sithawalla | Tan Rajah & Cheah |
| Thaddeus Tan | Tan Rajah & Cheah |
| Clara Ng | Tan Rajah & Cheah |
| Clement Tan | Selvam LLC |
| Luis Duhart | Selvam LLC |
| Colin Tan | Selvam LLC |
| Dupinderjeet Kaur | Selvam LLC |
4. Facts
- Group Lease Holdings Pte Ltd (GLH) owed a judgment debt to JTrust Asia Pte Ltd (JTA) since April 2023.
- GLH failed to pay any part of that judgment debt.
- JTA presented a winding up application against GLH.
- GLH's sole shareholder is Group Lease Public Company Ltd (GL Thailand).
- GLH has six subsidiaries.
- GLH has no business operations and functions as a financing node.
- GLH admits that its current liabilities exceed its current assets by close to US$100m.
5. Formal Citations
- JTrust Asia Pte Ltd v Group Lease Holdings Pte Ltd, Companies Winding Up No 67 of 2023, [2024] SGHC 195
6. Timeline
| Date | Event |
|---|---|
| JTrust Asia Pte Ltd entered into investment agreements with Group Lease Thailand. | |
| JTrust Asia Pte Ltd entered into investment agreements with Group Lease Thailand. | |
| Mitsuji Konoshita relinquished roles in GL Thailand. | |
| JTrust Asia Pte Ltd commenced suit against Group Lease Holdings Pte Ltd. | |
| Court of Appeal held that GLH conspired with GL Thailand and MK. | |
| GLH paid Judgment Debt (1) in full. | |
| JTrust Asia Pte Ltd issued originating application against Group Lease Holdings Pte Ltd. | |
| Andrew Ang SJ granted the mareva injunction. | |
| GL Thailand commenced suit against GLH. | |
| GLH entered an appearance in GL Thailand v GLH. | |
| GLH filed a defence. | |
| GL Thailand applied to enter summary judgment against GLH. | |
| Court entered summary judgment against GLH. | |
| Lee Seiu Kin J handed down his decision in JTA v GLH (2). | |
| JTrust Asia Pte Ltd served a written demand on GLH. | |
| JTrust Asia Pte Ltd presented winding up application against GLH. | |
| GLH filed an appeal to the Appellate Division. | |
| JTA commenced Thai rehabilitation proceedings against GL Thailand. | |
| GLH applied for execution on Judgment Debt (2) to be stayed. | |
| Lee Seiu Kin J ordered no stay of execution on Judgment Debt (2). | |
| JTrust Asia Pte Ltd filed an application to appoint a provisional liquidator. | |
| Lee Seiu Kin J allowed JTA’s application and appointed Mr Borrelli as GLH’s provisional liquidator. | |
| Mr Borrelli applied for permission to appoint himself or his nominee as a director of six named Subsidiaries. | |
| Appellate Division heard and dismissed GLH’s appeal. | |
| Lee Seiu Kin J granted Mr Borrelli the permission he sought. | |
| GLH was refused leave to appeal the AD’s dismissal of its appeal to the Court of Appeal. | |
| Winding up application fixed for hearing. | |
| GL Thailand appealed against the decision. | |
| Judgment Date |
7. Legal Issues
- Inability to Pay Debts
- Outcome: The court found that GLH was unable to pay its debts within the meaning of s 125(1)(e) of the IRDA.
- Category: Substantive
- Related Cases:
- [2021] 2 SLR 478
- [2013] Bus LR 715
- Abuse of Process
- Outcome: The court found that JTA’s conduct in presenting and pursuing this winding up application does not amount to an abuse of process.
- Category: Procedural
- Bias of Provisional Liquidator
- Outcome: The court did not accept that Mr Borrelli’s conduct is any grounds even for an allegation of a reasonable suspicion of bias, let alone for an allegation of actual bias.
- Category: Procedural
8. Remedies Sought
- Winding up order
9. Cause of Actions
- Winding up application
10. Practice Areas
- Insolvency
- Commercial Litigation
11. Industries
- Finance
- Investment Holding
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| JTrust Asia Pte Ltd v Group Lease Holdings Pte Ltd | Court of Appeal | Yes | [2020] 2 SLR 1256 | Singapore | The Court of Appeal held that GLH had conspired with GL Thailand and MK to use sham loan agreements and other fraudulent and deceptive means to induce JTA to enter into three investment agreements. |
| JTrust Asia Pte Ltd v Group Lease Holdings Pte Ltd and others | High Court | Yes | [2023] SGHC 167 | Singapore | The court held that the Court of Appeal’s decision in JTA v GLH (1) raised an issue estoppel precluding GLH and MK from relitigating whether they were jointly and severally liable to JTA in the torts of deceit and conspiracy. |
| Group Lease Holdings Pte Ltd and another v JTrust Asia Pte Ltd | Appellate Division of the High Court | Yes | [2023] SGHC(A) 37 | Singapore | The Appellate Division dismissed GLH’s appeal against Lee Seiu Kin J’s judgment in JTA v GLH (2) with costs. |
| 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 | The court held that the words “as they fall due” are to be imported into s 125(2)(c) of the IRDA even though they appear nowhere in that subsection’s enacting words. |
| BNY Corporate Trustee Services Ltd v Eurosail-UK 2007-3BL plc and others | Privy Council | Yes | [2013] Bus LR 715 | United Kingdom | The Privy Council held that the phrase “as they fall due” should be understood to have been implicit in the test prescribed by the English equivalent of s 125(2)(c) from its legislative outset. |
| Founder Group (Hong Kong) Limited (in liquidation) v Singapore JHC Co Pte Ltd | Court of Appeal | Yes | [2023] 2 SLR 554 | Singapore | Cited for the definition of contingent debts. |
| BNP Paribas v Jurong Shipyard Pte Ltd | Court of Appeal | Yes | [2009] 2 SLR(R) 949 | Singapore | Cited for the principle that s 125(1)(e) of the IRDA confers a residual discretion upon the court not to make a winding up order even if a company is deemed to be unable to pay its debts. |
| Perennial (Capitol) Pte Ltd and another v Capitol Investment Holdings Pte Ltd | Court of Appeal | Yes | [2018] 1 SLR 763 | Singapore | Cited for the principle that the residual discretion is to be exercised judicially, having regard in the usual way to all the circumstances of each case. |
| Lai Shit Har v Lau Yu Man | Court of Appeal | Yes | [2008] 4 SLR(R) 348 | Singapore | Cited for the principle that the residual discretion is to be exercised judicially, having regard in the usual way to all the circumstances of each case. |
| Bank of Baroda v Panessar and others | Chancery Division | Yes | [1985] 1 Ch 335 | England and Wales | The court held that a debtor does not breach a contractual payment obligation to its creditor if the debtor takes only the additional time necessary to effect the mechanics of payment of its debt to its creditor after the debt has fallen contractually due. |
| Roberto Building Materials Pte Ltd and others v Oversea-Chinese Banking Corp and another | High Court | Yes | [2003] 3 SLR(R) 217 | Singapore | The court followed Bank of Baroda v Panessar and others. |
| Anwar Siraj and Another v The Tai Ping Insurance Co Ltd (Teo Hee Lai Building Construction Pte Ltd, Third Party) | District Court | Yes | [2005] SGDC 3 | Singapore | The court followed Bank of Baroda v Panessar and others. |
| Seah Chee Wan and Anor v Connectus Group Pte Ltd | High Court | Yes | [2019] SGHC 28 | Singapore | Cited by GLH to submit that a court may exercise its discretion not to wind up a company on the ground that it may be able to pay its debts with support from affiliated companies. |
| Adcrop Pte Ltd v Gokul Vegetarian Restaurant and Café Pte Ltd (Rajeswary d/o Sinan and another, non-parties) | High Court | Yes | [2023] 5 SLR 1435 | Singapore | Cited by GLH to submit that JTA has presented this winding up application for an ulterior purpose, ie, to gain control of GLH and the Subsidiaries, and it is therefore an abuse of the process of the court. |
| Petroships Investment Pte Ltd v Wealthplus Pte Ltd (in members’ voluntary liquidation) (Koh Brothers Building & Civil Engineering Contractor (Pte) Ltd and another, interveners) and another matter | High Court | Yes | [2018] 3 SLR 687 | Singapore | Cited for the principle that impartiality is of course a cardinal prerequisite for a liquidator properly to fulfil his duties. |
| Liquidators of Ace Class Precision Engineering Pte Ltd (in members’ voluntary liquidation) v Tan Boon Hwa and others and other matters | High Court | Yes | [2022] 3 SLR 539 | Singapore | Cited for the test that the court applies when it is asked to remove a liquidator already in office for cause, whether under ss 139(1) or s 174 of the IRDA, is whether the liquidator is motivated by actual bias or has conducted himself so as to give rise to a perception of bias. |
| DB International Trust (Singapore) Ltd v Medora Xerxes Jamshid | High Court | Yes | [2023] 5 SLR 773 | Singapore | Cited for the test that the court applies when it is asked to remove a liquidator already in office for cause, whether under ss 139(1) or s 174 of the IRDA, is whether the liquidator is motivated by actual bias or has conducted himself so as to give rise to a perception of bias. |
| Cornhill Insurance plc v Improvement Services Ltd | High Court | Yes | [1986] 1 WLR 114 | England and Wales | Cited for the principle that it is not an abuse of process for a creditor to present a winding up application against a company – whether it is solvent or insolvent – to put commercial pressure on the company to pay a debt, so long as the debt is undisputed. |
| Re Hong Huat Development Co (Pte) Ltd | High Court | Yes | [2000] 3 SLR(R) 431 | Singapore | Cited for the principle that it is not an abuse of process for a creditor to present a winding up application against a company – whether it is solvent or insolvent – to put commercial pressure on the company to pay a debt, so long as the debt is undisputed. |
| IOC Australia Pte Ltd v Mobil Oil Australia Ltd | High Court | Yes | (1975) 11 ALR 417 | Australia | Cited for the principle that it is not the case that only a creditor who feels goodwill to its debtor is entitled to a winding up order. |
| Low Hua Kin v Kumagai-Zenecon Construction Pte Ltd | High Court | Yes | [2000] 2 SLR(R) 689 | Singapore | Cited for the principle that the court’s overall purpose in appointing a PL is to preserve the status quo in the company. |
| Re Carpark Industries Pty. Ltd. (in liquidation) and Companies Act 161 (No 1) | Supreme Court of New South Wales | Yes | [1967] 1 NSWR 337 | Australia | Cited for the principle that the court’s overall purpose in appointing a PL is to preserve the status quo in the company. |
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)(a) of the Insolvency, Restructuring and Dissolution Act 2018 | Singapore |
| Section 125(2)(c) of the Insolvency, Restructuring and Dissolution Act 2018 | Singapore |
| Section 135(1) of the Insolvency, Restructuring and Dissolution Act 2018 | Singapore |
| Section 134(a) of the Insolvency, Restructuring and Dissolution Act 2018 | Singapore |
| Section 139(1) of the Insolvency, Restructuring and Dissolution Act 2018 | Singapore |
| Section 174 of the Insolvency, Restructuring and Dissolution Act 2018 | Singapore |
| Companies Act 1967 | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Winding up
- Insolvency
- Judgment debt
- Provisional liquidator
- Abuse of process
- Bias
- Cash flow test
- Current assets
- Current liabilities
- Mareva injunction
15.2 Keywords
- Winding up
- Insolvency
- Judgment debt
- Singapore
- JTrust Asia
- Group Lease Holdings
- Inability to pay debts
16. Subjects
- Insolvency Law
- Winding up
- Civil Procedure
17. Areas of Law
- Insolvency Law
- Winding up