FXA Investment Holdings v Tan Wei Cheong: Proof of Debt in Liquidation & Lease Termination
FXA Investment Holdings Pte Ltd ("FXA") applied to the General Division of the High Court of Singapore on 18 October 2024 to reverse the decision of the liquidators of Fusionex Pte Ltd ("Company"), Tan Wei Cheong and Lim Loo Khoon, to reject FXA's proof of debt. FXA claimed the Company owed them $270,057.40 for outstanding rent, service charges, and an agency fee related to a sub-lease agreement. The court, presided over by Audrey Lim J, found that a sub-lease and a 'Gentlemen's Agreement' existed between FXA and the Company. The court allowed the application in part, directing the liquidators to accept the proof of debt for $110,701.54 for rent and service charges up to 7 March 2024, and $49,582.19 for the agency fee.
1. Case Overview
1.1 Court
General Division of the High Court1.2 Outcome
Application allowed in part.
1.3 Case Type
Insolvency
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
FXA Investment Holdings sought to reverse liquidators' rejection of its proof of debt. The court allowed the application in part, finding a sub-lease existed.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| FXA Investment Holdings Pte Ltd | Applicant | Corporation | Application allowed in part | Partial | Pradeep Pillai, Joycelyn Lin Shuling, Rashpal Singh Sidhu |
| Tan Wei Cheong (Chen Weizhang) (in his capacity as a joint and several liquidator of Fusionex Pte Ltd (in liquidation)) | Respondent | Individual | Decision reversed in part | Partial | Edward Tiong Yung Shu, Tan Yen Jee, Kheshin Cheong Rui Pin |
| Lim Loo Khoon (in his capacity as a joint and several liquidator of Fusionex Pte Ltd (in liquidation)) | Respondent | Individual | Decision reversed in part | Partial | Edward Tiong Yung Shu, Tan Yen Jee, Kheshin Cheong Rui Pin |
| Fusionex Pte Ltd (in liquidation) | Respondent | Corporation | Partial Judgment against Respondent | Partial | Edward Tiong Yung Shu, Tan Yen Jee, Kheshin Cheong Rui Pin |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Audrey Lim | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Pradeep Pillai | PRP Law LLC |
| Joycelyn Lin Shuling | PRP Law LLC |
| Rashpal Singh Sidhu | PRP Law LLC |
| Edward Tiong Yung Shu | Allen & Gledhill LLP |
| Tan Yen Jee | Allen & Gledhill LLP |
| Kheshin Cheong Rui Pin | Allen & Gledhill LLP |
4. Facts
- FXA entered into a lease agreement with SG OGS Pte Ltd for the premises at 1 George Street.
- FXA claims it was incorporated solely for the purpose of entering into the Master Lease.
- FXA claims it entered into a back-to-back arrangement with the Company to sub-let the Premises.
- The Company is wholly owned by a Malaysian-incorporated company.
- The Company filed an application for winding up and it was wound up on 26 January 2024.
- The Liquidators were appointed.
- FXA submitted its proof of debt for outstanding rent, service charge, electricity charge, and an agency fee.
5. Formal Citations
- FXA Investment Holdings Pte LtdvTan Wei Cheong (in his capacity as a joint and several liquidator of Fusionex Pte Ltd (in liquidation)) and others, Originating Application No 1083 of 2024, [2025] SGHC 23
6. Timeline
| Date | Event |
|---|---|
| FXA entered into a lease agreement with SG OGS Pte Ltd. | |
| Lease of the premises commenced. | |
| Company abruptly ceased to pay FXA the monthly rental and related expenses. | |
| Company was wound up. | |
| Liquidators informed FXA of their appointment. | |
| FXA submitted its proof of debt. | |
| Liquidators queried FXA on its claims in the proof of debt. | |
| FXA responded to the liquidators' queries. | |
| Liquidators informed FXA that it was rejecting FXA’s proof of debt. | |
| FXA filed the application to reverse the liquidators’ decision. | |
| Judgment reserved. | |
| Judgment delivered. |
7. Legal Issues
- Proof of Debt
- Outcome: The court disagreed with the liquidators’ decision to reject the proof of debt wholly and allowed FXA’s application in part.
- Category: Substantive
- Sub-Issues:
- Rejection of proof of debt by liquidators
- Sufficiency of supporting documents
- Existence of Sub-Lease and Gentlemen's Agreement
- Outcome: The court was satisfied that FXA had proven on a balance of probabilities the existence of the Sub-Lease and the Gentlemen’s Agreement.
- Category: Substantive
- Sub-Issues:
- Oral agreement
- Intention to create legal relations
- Termination of Sub-Lease
- Outcome: The court found that FXA had accepted the Company’s continuing repudiatory breach of the Sub-Lease at the latest on 7 February 2024, thereby terminating the Sub-Lease.
- Category: Substantive
- Sub-Issues:
- Repudiatory breach
- Acceptance of repudiation
- Surrender of lease
- Notice to quit
- Mitigation of Loss
- Outcome: The court was satisfied that the agency fee would have been recoverable as damages by FXA as the Agency Fee was an expense reasonably incurred by FXA in taking reasonable steps to mitigate its loss.
- Category: Substantive
- Sub-Issues:
- Reasonable steps to mitigate loss
- Agency fee
8. Remedies Sought
- Reversal of liquidators’ decision
- Monetary damages
9. Cause of Actions
- Breach of Contract
10. Practice Areas
- Commercial Litigation
- Insolvency Law
- Landlord and Tenant Law
11. Industries
- Real Estate
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Re Fusionex Pte Ltd (Resorts World at Sentosa Pte Ltd, non-party) | High Court | Yes | [2024] 4 SLR 956 | Singapore | Cited for the background to the Company’s management and how it came to be wound up. |
| Rich Construction Co Pte Ltd v Greatearth Construction Pte Ltd (in liquidation) and others and another matter | High Court | Yes | [2024] 5 SLR 570 | Singapore | Cited for the principle that the court hears applications to reverse a liquidator's decision de novo. |
| Fustar Chemicals Ltd v Ong Soo Hwa (liquidator of Fustar Chemicals Pte Ltd) | High Court | Yes | [2009] 1 SLR(R) 844 | Singapore | Cited for the principle that the court hears applications to reverse a liquidator's decision de novo. |
| ERPIMA SA v Chee Yoh Chuang and another | High Court | Yes | [1997] 1 SLR(R) 923 | Singapore | Cited for the principle that the court hears applications to reverse a liquidator's decision de novo. |
| Fustar Chemicals Ltd (Hong Kong) v Liquidator of Fustar Chemicals Pte Ltd | High Court | Yes | [2009] 4 SLR(R) 458 | Singapore | Cited for the principle that a liquidator must have a reasonable basis on which to query a debt that appears to be genuine. |
| Jubilee Electronics Pte Ltd and others v Tai Wah Garments and Knitting Factory Pte Ltd | High Court | Yes | [1996] 1 SLR(R) 352 | Singapore | Cited for the principle that a prohibition on assignment or sub-letting does not make the sub-lease invalid or void. |
| Klerk-Elias Liza v K T Chan Clinic Pte Ltd | Court of Appeal | Yes | [1993] 1 SLR(R) 609 | Singapore | Cited for the principle that the concept of repudiation and acceptance applies to a tenancy matter. |
| Tan Soo Leng David v Lim Thian Chai Charles and another | High Court | Yes | [1998] 1 SLR(R) 880 | Singapore | Cited for the principle that the concept of repudiation and acceptance applies to a tenancy matter. |
| Lim Kau Tee and another v Lee Kay Li | High Court | Yes | [2005] SGHC 162 | Singapore | Cited for the principle that the concept of repudiation and acceptance applies to a tenancy matter. |
| Hsu Hsueh Hui (alias Jenny Hsu) v Foong Yook Kooi and others | High Court | Yes | [2022] SGHC 108 | Singapore | Cited for the principle that the concept of repudiation and acceptance applies to a tenancy matter. |
| RBC Properties Pte Ltd v Defu Furniture Pte Ltd | High Court | Yes | [2015] 1 SLR 997 | Singapore | Cited for the principle that the concept of repudiation and acceptance applies to a tenancy matter and that a lease agreement creates contractual rights and obligations between the lessor and lessee. |
| Ritzland Investment Pte Ltd v Grace Management & Consultancy Services Pte Ltd | High Court | Yes | [2014] 2 SLR 1342 | Singapore | Cited for the principle that a lease agreement creates contractual rights and obligations between the lessor and lessee. |
| The “Asia Star” | High Court | Yes | [2010] 2 SLR 1154 | Singapore | Cited for the principle that the burden of proving that an aggrieved party has failed to fulfil its duty to mitigate falls on the defaulting party. |
13. Applicable Rules
| Rule Name |
|---|
| Insolvency, Restructuring and Dissolution (Corporate Insolvency and Restructuring) Rules 2020 |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Insolvency, Restructuring and Dissolution Act 2018 | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Proof of debt
- Liquidators
- Sub-Lease
- Gentlemen’s Agreement
- Repudiatory breach
- Mitigation of loss
- Agency fee
15.2 Keywords
- insolvency
- proof of debt
- liquidation
- lease
- sublease
- termination
- rent
- service charge
- agency fee
16. Subjects
- Insolvency
- Lease Agreements
- Contract Law
17. Areas of Law
- Insolvency Law
- Winding up
- Landlord and Tenant