Law Ching Hung v Aw Eng Hai: Application to Set Aside Rejection of Proof of Debt

In Law Ching Hung v Aw Eng Hai, before the General Division of the High Court of Singapore on 16 October 2024, the applicant, Law Ching Hung, sought to set aside the liquidator's rejection of his proof of debt against Park Hotel CQ Pte. Ltd. The court, Goh Yihan J, dismissed the application, finding no connection between the application and a separate suit (HC/S 364/2022) involving Park Hotel Management Pte Ltd. The court held that the liquidator was correct in rejecting the proof of debt based on available accounting records and the statement of affairs, which did not disclose any debt owing to the applicant by Park Hotel CQ Pte. Ltd.

1. Case Overview

1.1 Court

General Division of the High Court of the Republic of Singapore

1.2 Outcome

Application Dismissed

1.3 Case Type

Insolvency

1.4 Judgment Type

Ex Tempore Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Application to set aside liquidator's rejection of proof of debt. The court dismissed the application, finding no connection to a separate suit.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Law Ching HungApplicantIndividualApplication DismissedLostNanthini d/o Vijayakumar, Terence Yeo, John Thomas George
Aw Eng HaiRespondentIndividualRejection of Proof of Debt UpheldWonOng Boon Hwee William, Lee Bik Wei, Kay Tan Jia Xian, Tang Jia Ding Justin
Kon Yin TongRespondentIndividualRejection of Proof of Debt UpheldWonOng Boon Hwee William, Lee Bik Wei, Kay Tan Jia Xian, Tang Jia Ding Justin
Park Hotel CQ Pte. Ltd. (in liquidation)RespondentCorporationRejection of Proof of Debt UpheldWonOng Boon Hwee William, Lee Bik Wei, Kay Tan Jia Xian, Tang Jia Ding Justin

3. Judges

Judge NameTitleDelivered Judgment
Goh YihanJudge of the High CourtYes

4. Counsels

Counsel NameOrganization
Nanthini d/o VijayakumarTSMP Law Corporation
Terence YeoTSMP Law Corporation
John Thomas GeorgeTSMP Law Corporation
Ong Boon Hwee WilliamAllen & Gledhill LLP
Lee Bik WeiAllen & Gledhill LLP
Kay Tan Jia XianAllen & Gledhill LLP
Tang Jia Ding JustinAllen & Gledhill LLP

4. Facts

  1. The applicant was a director of Park Hotel CQ Pte Ltd (PHCQ), which was placed in liquidation on 19 November 2021.
  2. The applicant paid PHCQ a director's loan of $7,812,000 on 31 June 2013.
  3. PHCQ repaid the applicant $3,012,000 between 31 August 2013 and 14 January 2016, leaving an outstanding balance of $4,800,000.
  4. The applicant transferred $2,000,000 from PHCQ to Park Hotel Management Pte Ltd (PHMPL) on 9 December 2020 and another $2,000,000 on 4 January 2021.
  5. The applicant, as director of PHMPL, transferred $4,413,505.21 to himself on 8 January 2021, including the $4,000,000 transferred from PHCQ to PHMPL.
  6. PHCQ and PHMPL commenced separate suits against the applicant, alleging breach of duties and improper transfer of assets.
  7. The liquidators of PHCQ rejected the applicant's proof of debt for $4,800,000.

5. Formal Citations

  1. Law Ching Hung v Aw Eng Hai, Originating Application No 742 of 2024, [2024] SGHC 263

6. Timeline

DateEvent
Park Hotel CQ Pte Ltd placed in liquidation
Park Hotel Management Pte Ltd placed in liquidation
HC/S 363/2022 commenced against the applicant
HC/S 364/2022 commenced against the applicant
Settlement reached in respect of Suit 363
Applicant's solicitors submitted the Proof of Debt to the respondents
Mr. Aw issued the Notice of Rejection of Proof of Debt
Judgment issued

7. Legal Issues

  1. Stay of Proceedings
    • Outcome: The court declined to stay the application, finding no multiplicity of proceedings and no connection between the application and Suit 364.
    • Category: Procedural
    • Sub-Issues:
      • Multiplicity of proceedings
  2. Rejection of Proof of Debt
    • Outcome: The court upheld the liquidator's rejection of the proof of debt, finding no provable debt under s 218(2)(a)(i) of the IRDA and no contingent debt under s 218(2)(a)(ii).
    • Category: Substantive

8. Remedies Sought

  1. Order to set aside the Notice of Rejection of Proof of Debt
  2. Order to accept the applicant's Proof of Debt
  3. Stay of proceedings

9. Cause of Actions

  • Breach of Director's Duties

10. Practice Areas

  • Insolvency
  • Corporate Restructuring
  • Civil Litigation

11. Industries

  • Hospitality

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
BNP Paribas Wealth Management v Jacob Agam and anotherSingapore International Commercial CourtYes[2017] 3 SLR 27SingaporeAcknowledged the court's inherent power to order a stay of proceedings.
Chan Chin Cheung v Chan Fatt CheungCourt of AppealYes[2010] 1 SLR 1192SingaporeAcknowledged the court's inherent power to order a stay of proceedings.
Rich Construction Co Pte Ltd v Greatearth Construction Pte Ltd (in liquidation) and others and another matterGeneral Division of the High CourtYes[2024] 5 SLR 570SingaporeCited regarding the duty of liquidators to examine and investigate material to ascertain if debts were genuinely created and remained legally due, but distinguished on the facts.
Re Telegraph Construction CompanyN/AYes(1870) LR 10 Eq 384N/ACited for the definition of a contingent debt.

13. Applicable Rules

Rule Name
Rule 132 of the Insolvency, Restructuring and Dissolution (Corporate Insolvency and Restructuring) Rules 2020

14. Applicable Statutes

Statute NameJurisdiction
Supreme Court of Judicature Act 1969Singapore
Insolvency, Restructuring and Dissolution Act 2018Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Proof of Debt
  • Liquidation
  • Director's Loan
  • Relevant Transfers
  • Statement of Affairs
  • Provable Debt
  • Contingent Debt
  • Stay of Proceedings

15.2 Keywords

  • insolvency
  • proof of debt
  • liquidation
  • stay of proceedings
  • director's duties

16. Subjects

  • Insolvency
  • Corporate Law
  • Civil Procedure

17. Areas of Law

  • Insolvency Law
  • Civil Procedure