Lee Chen Seong Jeremy v Official Assignee: Striking Off Defunct Company with Outstanding Assets
Lee Chen Seong Jeremy appealed against the decision to dismiss his application for annulment of bankruptcy. The Court of Appeal considered whether Northstar Systems Pte Ltd, a defunct company, had abandoned its right to a proof of debt against Lee Chen Seong Jeremy by declaring it had no outstanding assets when applying to be struck off the register. The court held that Northstar had abandoned its right of proof against the Appellant’s bankruptcy estate and allowed the appeal.
1. Case Overview
1.1 Court
Court of Appeal of the Republic of Singapore1.2 Outcome
Appeal Allowed
1.3 Case Type
Civil
1.4 Judgment Type
Ex Tempore Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Appeal regarding the striking off of Northstar Systems Pte Ltd. Court held Northstar abandoned its right to a proof of debt against Lee Chen Seong Jeremy.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Official Assignee | Respondent | Government Agency | Appeal Dismissed | Lost | Lim Yew Jin of Insolvency & Public Trustee’s Office |
| Lee Chen Seong Jeremy | Appellant | Individual | Appeal Allowed | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Sundaresh Menon | Chief Justice | Yes |
| Judith Prakash | Justice of the Court of Appeal | No |
| Tay Yong Kwang | Justice of the Court of Appeal | No |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Lim Yew Jin | Insolvency & Public Trustee’s Office |
| Wong Soon Peng Adrian | Rajah & Tann LLP |
| Tao Tao | Rajah & Tann LLP |
4. Facts
- Northstar obtained a judgment against Lee Chen Seong Jeremy for US$516,085.11.
- Lee Chen Seong Jeremy was adjudged a bankrupt on 16 August 2002.
- Northstar was one of 11 creditors who filed proofs of debt with the Official Assignee.
- Northstar applied to strike itself off from the Companies Register on 31 October 2008.
- Northstar's directors declared that the company had no contingent assets and all assets had been cleared.
- The Northstar debt was not mentioned in Northstar's balance sheet.
- Northstar waived rights and claims in relation to a debt of US$230,342.36 owed to it by NSH.
5. Formal Citations
- Lee Chen Seong Jeremy v Official Assignee, Civil Appeal No 209 of 2017, [2018] SGCA 51
6. Timeline
| Date | Event |
|---|---|
| Northstar obtained judgment against Lee Chen Seong Jeremy for US$516,085.11 | |
| Northstar applied to make Lee Chen Seong Jeremy a bankrupt | |
| Lee Chen Seong Jeremy was adjudged a bankrupt | |
| Northstar applied to be struck off from the Companies Register | |
| Northstar was struck off the Register | |
| Lee Chen Seong Jeremy's solicitors wrote to the Official Assignee to inquire about outstanding debts | |
| The Official Assignee replied stating that striking off Northstar did not release Lee Chen Seong Jeremy from liabilities | |
| Lee Chen Seong Jeremy filed Originating Summons (Bankruptcy) No 31 of 2017 seeking annulment of bankruptcy | |
| Lee Chen Seong Jeremy informed the Court he procured a sponsor to pay $550,000 to the Official Assignee | |
| Judgment delivered |
7. Legal Issues
- Abandonment of Right of Proof
- Outcome: The court held that Northstar had abandoned its right of proof against the Appellant’s bankruptcy estate.
- Category: Substantive
- Sub-Issues:
- Overt act of abandonment
- Subjective intention to relinquish property
- Waiver of Right of Proof
- Outcome: The court rejected the Appellant’s argument on waiver by election.
- Category: Substantive
- Vesting of Outstanding Assets
- Outcome: The court held that section 346 of the Companies Act was irrelevant because the right in question had been abandoned.
- Category: Substantive
8. Remedies Sought
- Annulment of Bankruptcy
9. Cause of Actions
- No cause of actions
10. Practice Areas
- Commercial Litigation
- Insolvency Litigation
11. Industries
- No industries specified
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Trustee for the Bankrupt Estate of Lasic v Lasic | Unknown | Yes | [2009] 232 FLR 121 | Unknown | Cited for the principle that bankruptcy converts debts into a right to share in the bankruptcy estate. |
| Clyne v Deputy Commissioner of Taxation | High Court of Australia | Yes | (1984) 154 CLR 589 | Australia | Cited for the principle that a bankrupt is no longer obliged to pay creditors, and creditors cannot safely accept payment. |
| Pitman v Pantzer | Federal Court of Australia | Yes | (2001) 115 FCR 361 | Australia | Cited for the principle that a bankrupt is no longer obliged to pay creditors, and creditors cannot safely accept payment. |
| Samootin v Shea | New South Wales Court of Appeal | Yes | [2010] NSWCA 371 | Australia | Cited for the principle that a bankrupt is no longer obliged to pay creditors, and creditors cannot safely accept payment. |
| Audi Construction Pte Ltd v Kian Hiap Construction Pte Ltd | Unknown | Yes | [2018] 1 SLR 317 | Singapore | Cited to define the doctrine of waiver by election. |
| Ong Hong Kiat v RIQ Pte Ltd | High Court | Yes | [2013] SGHC 131 | Singapore | Cited as an example of abandonment being applied to arbitration agreements. |
| Edward J Kearns v T A Dilleen (Inspector of Taxes) | Unknown | Yes | [1997] 3 IR 287 | Ireland | Cited for the definition of abandonment as a unilateral relinquishment of property. |
| Wong Seng Kwan v Public Prosecutor | High Court | Yes | [2012] 3 SLR 12 | Singapore | Cited for the principle that the court should be slow to make any finding of abandonment except in the clearest of cases. |
| Re Fivestar Properties Limited | High Court of Justice | Yes | [2015] EWHC 2782 (Ch) | England and Wales | Cited to illustrate a case where a company's assets were mistaken and not accounted for, distinguishing it from the present case. |
13. Applicable Rules
| Rule Name |
|---|
| Bankruptcy Rules (Cap 20, R 1, 2006 Ed) rr 52 and 245(3) |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act (Cap 50, 2006 Rev Ed) s 346 | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Striking off
- Defunct company
- Outstanding assets
- Proof of debt
- Abandonment
- Waiver
- Official Assignee
- Bankruptcy estate
- Right of proof
- Companies Act
15.2 Keywords
- striking off
- defunct company
- outstanding assets
- abandonment
- waiver
- bankruptcy
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Striking off defunct companies | 80 |
| Bankruptcy | 75 |
| Company Law | 65 |
| Winding Up | 50 |
16. Subjects
- Insolvency
- Company Law
- Bankruptcy