Zipmex Pte Ltd v Zipmex Asia Pte Ltd: Setting Aside Creditors’ Meeting Resolutions for Substantive Irregularities

Zipmex Pte Ltd (“ZPL”) applied to the High Court of Singapore to set aside resolutions passed at a creditors’ meeting of Zipmex Asia Pte Ltd (“ZAPL”), arguing substantive irregularities. The court allowed ZPL's application, set aside the resolutions, and will appoint a liquidator. ZAPL's application for a declaration of validity was dismissed. The court found that the provisional liquidator improperly adjudicated proofs of debt and that the meeting was improperly conducted.

1. Case Overview

1.1 Court

General Division of the High Court of the Republic of Singapore

1.2 Outcome

Application to proceed allowed and resolutions set aside on the basis of substantive irregularities. The Court will appoint a liquidator.

1.3 Case Type

Insolvency

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

The High Court set aside resolutions from a Zipmex Asia Pte Ltd creditors’ meeting due to substantive irregularities, including improper debt adjudication.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Zipmex Pte LtdApplicantCorporationApplication AllowedWon
Zipmex Asia Pte LtdRespondentCorporationApplication DismissedLost
Ellyn Tan HuixianRespondentIndividualAppointment VoidLost

3. Judges

Judge NameTitleDelivered Judgment
Aidan Xu @ Aedit AbdullahJudgeYes

4. Counsels

Counsel NameOrganization
Justin Yip Yung KeongWithers KhattarWong LLP
Lam Zhen YuWithers KhattarWong LLP
Wong Sze QiWithers KhattarWong LLP
Cheang Hui XuanWithers KhattarWong LLP
Daniel Chia Hsiung WenProlegis LLC
Low Hui Xuan CarrisaProlegis LLC
Tang Yuan JonathanProlegis LLC

4. Facts

  1. ZPL is a wholly-owned subsidiary of ZAPL.
  2. Mr. Marcus Lim is the sole director of both ZPL and ZAPL.
  3. ZPL was wound up by the court on 26 February 2024.
  4. Mr. Wong was appointed as ZPL's liquidator.
  5. Mr. Lim declared ZAPL unable to continue as a going concern on 29 April 2024.
  6. Ms. Tan was appointed as ZAPL’s provisional liquidator.
  7. ZPL submitted a proof of debt for $48,972,453.
  8. Ms. Tan rejected $42,515,205 of ZPL’s proof of debt for voting purposes.
  9. Ms. Tan rejected claims of approximately $16.6m by Thai customers for voting purposes.
  10. The Notice of Creditors’ Meeting was not accompanied by a general proxy form.

5. Formal Citations

  1. Zipmex Pte Ltd v Zipmex Asia Pte Ltd and another and another matter, Originating Applications Nos 603 of 2024 and 605 of 2024 and Summonses Nos 2020 and 2021 of 2024, [2024] SGHC 298

6. Timeline

DateEvent
Insolvency, Restructuring and Dissolution Act 2018 enacted
ZPL wound up; Mr. Wong appointed as liquidator
Mr. Lim declared ZAPL unable to continue as going concern; Ms. Tan appointed as provisional liquidator
Ms. Tan provided notice of a creditors’ meeting
ZPL submitted its proof of debt
Extraordinary general meeting held for ZAPL; resolutions passed for voluntary winding up and appointment of Ms. Tan
Creditors’ Meeting held
ZPL notified ZAPL and Ms. Tan of irregularities in Creditors’ Meeting
Sealing order granted for Ms. Tan’s affidavit
Judgment reserved
Judgment issued

7. Legal Issues

  1. Validity of Creditors’ Meeting
    • Outcome: The court declared the Creditors’ Meeting invalid due to substantive irregularities.
    • Category: Substantive
    • Sub-Issues:
      • Improper adjudication of proofs of debt
      • Incorrect wording of resolution
      • Omission of general proxy forms
  2. Powers of Provisional Liquidator
    • Outcome: The court held that the provisional liquidator had no power to adjudicate on proofs of debt prior to the creditors’ meeting without leave from the court.
    • Category: Substantive
    • Sub-Issues:
      • Adjudication of proofs of debt before creditors' meeting
  3. Application of Section 176(1) of the IRDA
    • Outcome: The court held that section 176(1) of the IRDA only applies to validate acts by the liquidator prior to the discovery of the defects in the liquidator’s appointment.
    • Category: Substantive
    • Sub-Issues:
      • Validation of liquidator's acts
      • Timing of discovery of defects

8. Remedies Sought

  1. Order declaring the Creditors’ Meeting invalid
  2. Order declaring resolutions passed at the Creditors’ Meeting void
  3. Order declaring Ms. Tan’s exercise of functions and powers as liquidator void
  4. Order appointing Mr. Wong as ZAPL’s liquidator

9. Cause of Actions

  • Setting aside resolutions passed at creditors’ meeting
  • Declaration of invalidity of creditors’ meeting

10. Practice Areas

  • Insolvency
  • Restructuring
  • Liquidation

11. Industries

  • Financial Services
  • Cryptocurrency

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Korea Asset Management Corp v Daewoo Singapore Pte Ltd (in liquidation)High CourtYes[2004] 1 SLR(R) 671SingaporeCited for the factors to consider when granting leave from the automatic moratorium after the commencement of winding up.
Thio Keng Poon v Thio Syn Pyn and others and another appealCourt of AppealYes[2010] 3 SLR 143SingaporeCited for the principle that section 264(2) of the IRDA has no application where the irregularity is substantive as opposed to procedural.
Sysma Construction Pte Ltd v EK Developments Pte LtdHigh CourtYes[2007] 2 SLR(R) 742SingaporeCited for the principle that a creditors’ meeting is not merely to confirm the company’s appointment of the liquidator, but to also consider other persons.
The Mercantile Bank of Australia Ltd v DinwoodieVictorian Supreme CourtYes(1902) 28 VLR 491AustraliaCited for the principle that the provision validates acts done by liquidators who were not or could never have been legally appointed, until the validity of their appointment is called into question.
OBG Ltd and another v Allan and othersHouse of LordsYesOBG Ltd and another v Allan and others [2008] 1 AC 1United KingdomCited and distinguished regarding the interpretation of insolvency legislation concerning the validity of a liquidator's acts.
Re Bridport Old Brewery CoCourt of Appeal in ChanceryYesRe Bridport Old Brewery Co (1867) LR 2 Ch App 191United KingdomCited for the principle that the provision validating a liquidator's acts should be interpreted restrictively.
Andrew Bland and another v JDK Construction Limited (in liquidation) and anotherHigh Court of JusticeYesAndrew Bland and another v JDK Construction Limited (in liquidation) and another (2023) EWHC 2805 (Ch)United KingdomCited for the principle that even if there was a valid winding up of the company, section 232 of the UK Insolvency Act would not apply to validate acts done subsequent to the discovery of defects in the liquidator's appointment.
Sazean Engineering & Construction Sdn Bhd v Bumi Bersatu Resources Sdn BhdHigh CourtYesSazean Engineering & Construction Sdn Bhd v Bumi Bersatu Resources Sdn Bhd [2019] 1 MLJ 495MalaysiaCited for the principle that only acts done before the discovery of the defects may be validated.
Re Deisara Pty Ltd (in liq)Supreme CourtYesRe Deisara Pty Ltd (in liq) [1992] 7 ACSR 737AustraliaCited and distinguished regarding the validation of acts performed by a liquidator after the discovery of defects in their appointment.
Davidson v Global Investments International Ltd (No 2)Supreme CourtYesDavidson v Global Investments International Ltd (No 2) (1996) 19 ACSR 332AustraliaCited and distinguished regarding the actions of a provisional liquidator aware of challenges to their appointment.
Parkinson v MorkayaSupreme CourtYesParkinson v Morkaya [2008] NSWSC 1183AustraliaCited and distinguished regarding the validation of acts performed by a provisional liquidator with defects in their qualification.

13. Applicable Rules

Rule Name
Rule 179(1) of the Insolvency, Restructuring and Dissolution (Corporate Insolvency and Restructuring) Rules 2020
Rule 101 of the Insolvency, Restructuring and Dissolution (Corporate Insolvency and Restructuring) Rules
Rule 85 of the Insolvency, Restructuring and Dissolution (Corporate Insolvency and Restructuring) Rules
Rule 178(1) of the CIR Rules

14. Applicable Statutes

Statute NameJurisdiction
Insolvency, Restructuring and Dissolution Act 2018Singapore
Section 264(2) of the Insolvency, Restructuring and Dissolution Act 2018Singapore
Section 170(2) of the Insolvency, Restructuring and Dissolution Act 2018Singapore
Section 160(1)(b) of the Insolvency, Restructuring and Dissolution Act 2018Singapore
Section 166 of the Insolvency, Restructuring and Dissolution Act 2018Singapore
Section 167 of the Insolvency, Restructuring and Dissolution Act 2018Singapore
Section 161 of the Insolvency, Restructuring and Dissolution Act 2018Singapore
Section 171 of the Insolvency, Restructuring and Dissolution Act 2018Singapore
Section 445(1) of the Insolvency, Restructuring and Dissolution Act 2018Singapore
Section 173 of the Insolvency, Restructuring and Dissolution Act 2018Singapore
Section 176(1) of the Insolvency, Restructuring and Dissolution Act 2018Singapore
Interpretation Act 1965Singapore
Companies Act 1967Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Creditors’ Meeting
  • Provisional Liquidator
  • Proof of Debt
  • Substantive Irregularities
  • Voluntary Winding Up
  • Section 176(1) of the IRDA
  • General Proxy Form
  • Special Proxy Form
  • Adjudication of Debt
  • Liquidator Appointment

15.2 Keywords

  • Insolvency
  • Winding Up
  • Liquidator
  • Creditors’ Meeting
  • Zipmex

17. Areas of Law

Area NameRelevance Score
Insolvency Law95
Winding Up95
Restructuring and Dissolution80
Commercial Disputes60
Evidence Law30
Jurisdiction20

16. Subjects

  • Insolvency Law
  • Winding Up
  • Liquidator
  • Provisional Liquidator