SME Care v Chan Siew Lee: Bankruptcy, Directors' Duties & Proof of Debt
In the General Division of the High Court of Singapore, Aidan Xu @ Aedit Abdullah J presided over three applications concerning the bankruptcy of Jannie Chan Siew Lee. SME Care Pte Ltd sought to enforce a proof of debt based on a consent judgment, which the court upheld, dismissing Ms. Chan's challenge. Fulcrum Distressed Partners Limited, assignee of Timor Global Pte Ltd's debt, contested the private trustee's rejection of parts of its proof of debt, while Ms. Chan challenged other accepted portions. The court allowed Fulcrum's application regarding the TL Sum and Finished Goods Sum, finding Ms. Chan in breach of her fiduciary duties as a director. Ms. Chan's application was dismissed.
1. Case Overview
1.1 Court
General Division of the High Court1.2 Outcome
Bankrupt's applications dismissed; Fulcrum's claim regarding TL Sum and Finished Goods Sum admitted.
1.3 Case Type
Insolvency
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Singapore court addresses bankrupt's challenge to debt proofs by SME Care & Fulcrum, involving director's duties and insolvency law.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| SME Care Pte Ltd | Plaintiff | Corporation | Claim Allowed | Won | Rajaram Muralli Raja |
| Jannie Chan Siew Lee | Defendant | Individual | Application Dismissed, Application Dismissed | Lost, Lost | |
| Fulcrum Distressed Partners Limited | Claimant | Corporation | Application Allowed | Won | Lee Eng Beng SC, Lye Yu Min |
| Yit Chee Wah | Respondent | Individual | Partial Claim Rejection Reversed | Partial | Hing Shan Shan Blossom SC, Claire Neoh Kai Xin, Lu En Hui Sarah |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Aidan Xu @ Aedit Abdullah | Judge of the High Court | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Rajaram Muralli Raja | K&L Gates Straits Law LLC |
| Lee Eng Beng SC | Rajah & Tann Singapore LLP |
| Lye Yu Min | Rajah & Tann Singapore LLP |
| Hing Shan Shan Blossom SC | Drew & Napier LLC |
| Claire Neoh Kai Xin | Drew & Napier LLC |
| Lu En Hui Sarah | Drew & Napier LLC |
4. Facts
- In 2012, JASC Pte Ltd obtained a loan from SME Care Pte Ltd, secured by mortgages and a personal guarantee from Ms. Chan.
- Ms. Chan was the sole director and shareholder of JASC Pte Ltd.
- In 2016, SME Care brought a suit against Ms. Chan to enforce the personal guarantee.
- A settlement agreement was entered into between SME Care and Ms. Chan in 2017, with a consent judgment signed.
- Ms. Chan defaulted on the settlement agreement, leading to a consent judgment against her in 2018.
- A bankruptcy order was made against Ms. Chan in 2019.
- Timor Global Pte Ltd (TGPL) filed a proof of debt against Ms. Chan’s estate, which was partially rejected by the private trustee.
- Ms. Chan was a director and shareholder of TGPL, which entered into a joint venture agreement with TL and Intraco.
- TGPL made payments to TL without commercial benefit, and the Bankrupt did nothing to recover the same.
- Sales proceeds from coffee beans sold by TGPL were transferred directly to TL instead of TGPL.
5. Formal Citations
- SME Care Pte Ltd v Chan Siew Lee Jannie and another matter, , [2025] SGHC 27
6. Timeline
| Date | Event |
|---|---|
| Loan obtained by JASC Pte Ltd from SME Care Pte Ltd. | |
| JASC applied to set aside the loan agreement or revise the interest rate. | |
| OS 850 heard; court reopened the loan and revised the interest rate. | |
| SME Care brought a suit against Ms. Chan to enforce the personal guarantee. | |
| Settlement agreement entered into between SME Care and Ms. Chan. | |
| Timor Global Pte Ltd placed into compulsory liquidation. | |
| Consent judgment entered against Ms. Chan. | |
| Bankruptcy order made against Ms. Chan. | |
| SME Care filed its proof of debt. | |
| Timor Global Pte Ltd filed a proof of debt. | |
| Timor Global Pte Ltd filed a revised proof of debt. | |
| Mr. Yit Chee Wah appointed as the private trustee in bankruptcy. | |
| The private trustee in bankruptcy admitted part of Timor Global Pte Ltd's proof of debt. | |
| Hearing date. | |
| Hearing date. | |
| Hearing date. | |
| Hearing date. | |
| Hearing date. | |
| Hearing date. | |
| Judgment reserved. |
7. Legal Issues
- Breach of Fiduciary Duty
- Outcome: The court found that the Bankrupt had breached her fiduciary duty to act bona fide in the best interests of the company.
- Category: Substantive
- Sub-Issues:
- Failure to act bona fide in the interest of the company
- Conflict of interest
- Failure to pursue repayment of debts
- Improper write-down of receivables
- Related Cases:
- [2024] 5 SLR 1006
- [2017] 2 SLR 592
- [2010] 4 SLR 1089
- [2024] 1 SLR 361
- [2014] 3 SLR 277
- [2020] SGHC 193
- [2013] 1 SLR 173
- [2004] 1 BCLC 131
- Provability of Debt in Bankruptcy
- Outcome: The court held that a claim for breach of fiduciary duty is a provable claim in bankruptcy as an unliquidated claim arising by reason of a breach of trust under s 87(3) of the Bankruptcy Act.
- Category: Substantive
- Sub-Issues:
- Unliquidated claims
- Breach of trust
- Breach of contract
- Related Cases:
- [2024] 5 SLR 1006
- Limitation of Actions
- Outcome: The court held that the exception in s 22(1)(a) of the Limitation Act applies, such that the six-year limitation period is inapplicable.
- Category: Procedural
- Sub-Issues:
- Fraudulent breach of trust
- Accrual of cause of action
- Related Cases:
- [2013] 1 SLR 173
8. Remedies Sought
- Setting aside proof of debt
- Reversing private trustee's decision
- Declaration that claims are not provable
9. Cause of Actions
- Breach of Fiduciary Duty
- Breach of Contract
10. Practice Areas
- Bankruptcy
- Commercial Litigation
- Insolvency
- Debt Recovery
11. Industries
- Finance
- Legal Services
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| SME Care Pte Ltd v Chan Siew Lee Jannie | High Court | Yes | [2018] SGHC 96 | Singapore | The court in this case rejected allegations made by Ms. Chan about the settlement agreement being obtained by fraud or misrepresentation. |
| 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 a creditor bears the burden of proving the debt on a balance of probabilities, and that the trustee in bankruptcy is reposed with the duty of examining the proof of debt and determining whether to admit or reject it. |
| Fustar Chemicals Ltd (Hong Kong) v Liquidator of Fustar Chemicals Pte Ltd | Court of Appeal | Yes | [2009] 4 SLR(R) 458 | Singapore | Cited for the principles for a private trustee’s adjudication of proofs of debt. |
| Thomson Plaza (Pte) Ltd v Liquidators of Yaohan Department Store Singapore Pte Ltd (in liquidation) | High Court | Yes | [2001] 2 SLR(R) 483 | Singapore | Cited for the principle that the court is to undertake a de novo review of the validity of the proof of debt. |
| Wiltopps (Asia) Ltd v Drew & Napier and another | High Court | Yes | [1999] 1 SLR(R) 252 | Singapore | Cited for the principle that a consent order is binding until it is set aside. |
| Poh Huat Heng Corp Pte Ltd and others v Hafizul Islam Kofil Uddin | High Court | Yes | [2012] 3 SLR 1003 | Singapore | Cited for the principle that a consent order or judgment cannot be set aside save for exceptional reasons. |
| Bakery Mart Pte Ltd v Ng Wei Teck Michael and others | High Court | Yes | [2005] 1 SLR(R) 28 | Singapore | Cited for the principle that the court will generally not interfere to set aside a consent order or judgment otherwise than in a fresh action brought to set aside such a judgment on grounds of fraud or other grounds undermining the agreement. |
| Re Menastar Finance Ltd (in liquidation), Menastar Ltd v Simon | English High Court | Yes | [2003] 1 BCLC 338 | England and Wales | Cited for the principle that when considering whether to admit a creditor’s proof based on a judgment debt, the court can in appropriate circumstances go behind the judgment to see whether the debt is truly due. |
| Re Medora Xerxes Jamshid (in his capacity as the private trustee in bankruptcy of Tan Han Meng) (Planar One & Associates Pte Ltd (in liquidation, non-party) | High Court | Yes | [2024] 5 SLR 1006 | Singapore | Cited for the principle that a claim for breach of fiduciary duty is a provable claim in bankruptcy as an unliquidated claim arising by reason of a breach of trust under s 87(3) of the Bankruptcy Act. |
| Goh Chan Peng and others v Beyonics Technology Ltd and another and another appeal | Court of Appeal | Yes | [2017] 2 SLR 592 | Singapore | Cited for the test of assessing whether there has been a breach of the duty to act bona fide in the interests of the company. |
| Liquidators of Progen Engineering Pte Ltd v Progen Holdings Ltd | High Court | Yes | [2010] 4 SLR 1089 | Singapore | Cited for the principle that the Creditor Duty is, in fact, part of a director’s duty to act in the best interests of the company and not a distinct duty that directors owe to creditors. |
| Foo Kian Beng v OP3 International Pte Ltd (in liquidation) | Court of Appeal | Yes | [2024] 1 SLR 361 | Singapore | Cited for the principle that when a company is insolvent, the creditors displace the shareholders as the primary bearers of the risk of loss arising from the manner in which the directors exercise their powers because an insolvent company effectively trades and conducts its business with its creditors’ money. |
| Inter-Pacific Petroleum Pte Ltd (in liquidation) v Goh Jin Hian | High Court | Yes | [2024] SGHC 178 | Singapore | Cited for the reasons for the view that the Court of Appeal did not effect any substantive change in the legal position adopted in earlier authorities regarding the Creditor Duty. |
| Dynasty Line Ltd (in liquidation) v Sukamto Sia and another and another appeal | Court of Appeal | Yes | [2014] 3 SLR 277 | Singapore | Cited for the principle that while the going concern test and the balance sheet tests provide useful indicia of a company’s financial health, a strict and technical application of these tests should be eschewed. |
| Ho Pak Kim Realty Co Pte Ltd (in liquidation) v Ho Soo Fong and another | High Court | Yes | [2020] SGHC 193 | Singapore | Cited for a similar situation where the court found that by refusing to collect a sum for the company, the defendants had breached the duty to act honestly and bona fide in the company’s interests. |
| Ho Soo Fong and another v Ho Pak Kim Realty Co Pte Ltd (in liquidation) | Court of Appeal | Yes | [2021] SGCA 35 | Singapore | Upholds the High Court's decision in Ho Pak Kim Realty Co Pte Ltd (in liquidation) v Ho Soo Fong and another [2020] SGHC 193. |
| Yong Kheng Leong and another v Panweld Trading Pte Ltd and another | High Court | Yes | [2013] 1 SLR 173 | Singapore | Cited for the principle that under s 22(1)(a) of the Limitation Act, a breach of trust is fraudulent if it is dishonest. |
| Gwembe Valley Development Co Ltd v Koshy (No 3) | N/A | Yes | [2004] 1 BCLC 131 | N/A | Cited for the principle that if a trustee acts in a way which he does not honestly believe is in the interests of the beneficiaries then he is acting dishonestly. |
| MCH International Pte Ltd and others v YG Group Pte Ltd and others and other appeals | Court of Appeal | Yes | [2019] 2 SLR 837 | Singapore | Cited for the principle that s 12(2)(b) of the Civil Law Act 1909 (2020 Rev Ed) allows for interest to be made payable as of right pursuant to any agreement. |
| The Oriental Insurance Co Ltd v Reliance National Asia Re Pte Ltd | High Court | Yes | [2009] 2 SLR(R) 385 | Singapore | Cited for the principle that s 12(2)(b) does not act as a bar against the grant of compound interest per se. |
13. Applicable Rules
| Rule Name |
|---|
| Bankruptcy Rules (Cap 20, R1, 2006 Rev Ed) r 174(1) |
| Bankruptcy Rules (Cap 20, R1, 2006 Rev Ed) r 198(1) |
| Bankruptcy Rules (Cap 20, R1, 2006 Rev Ed) r 199 |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Bankruptcy Act (Cap 20, 2009 Rev Ed) | Singapore |
| Bankruptcy Act (Cap 20, 2009 Rev Ed) s 76 | Singapore |
| Bankruptcy Act (Cap 20, 2009 Rev Ed) ss 33 | Singapore |
| Bankruptcy Act (Cap 20, 2009 Rev Ed) s 36(1) | Singapore |
| Bankruptcy Act (Cap 20, 2009 Rev Ed) ss 36(3) | Singapore |
| Bankruptcy Act (Cap 20, 2009 Rev Ed) s 39 | Singapore |
| Bankruptcy Act (Cap 20, 2009 Rev Ed) s 87 | Singapore |
| Bankruptcy Act (Cap 20, 2009 Rev Ed) s 87(1) | Singapore |
| Bankruptcy Act (Cap 20, 2009 Rev Ed) s 87(3) | Singapore |
| Bankruptcy Act (Cap 20, 2009 Rev Ed) s 103(3) | Singapore |
| Bankruptcy Act (Cap 20, 2009 Rev Ed) s 103(1) | Singapore |
| Civil Law Act 1909 (2020 Rev Ed) s 12(2)(b) | Singapore |
| Moneylenders Act 2008 (2020 Rev Ed) s 37(1) | Singapore |
| Limitation Act 1959 (2020 Rev Ed) | Singapore |
| Limitation Act 1959 (2020 Rev Ed) s 6 | Singapore |
| Limitation Act 1959 (2020 Rev Ed) s 22 | Singapore |
| Limitation Act 1959 (2020 Rev Ed) s 22(1)(a) | Singapore |
| Limitation Act 1959 (2020 Rev Ed) s 22(1)(b) | Singapore |
| Limitation Act 1959 (2020 Rev Ed) s 29 | Singapore |
| Limitation Act 1959 (2020 Rev Ed) s 29(1)(a) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Proof of Debt
- Private Trustee in Bankruptcy
- Consent Judgment
- Fiduciary Duty
- Breach of Trust
- Limitation Act
- TL Sum
- Finished Goods Sum
- Jannie Sum
- Purported Repayment
- Insolvency
- Director's Duties
15.2 Keywords
- Bankruptcy
- Proof of Debt
- Director's Duties
- Fiduciary Duty
- Insolvency
- Singapore Law
16. Subjects
- Bankruptcy
- Insolvency
- Directors' Duties
- Corporate Law
- Civil Procedure
17. Areas of Law
- Insolvency Law
- Bankruptcy Law
- Companies Law
- Directors' Duties
- Civil Procedure