SERVICE OF WINDING UP APPLICATION
In the ex tempore judgment of Gunvor SA v Atlantis Commodities Trading Pte Ltd [2024] SGHC 192 (“Gunvor”), the High Court reiterated the importance of ensuring proper service in winding up applications.
In Gunvor, the High Court dismissed the claimant’s winding up application in HC/CWU 87/2024 (“CWU 87”) because the originating application and supporting affidavit (the “Cause Papers”) and the statutory demand were not properly served on the Defendant.
The law on winding up. Pursuant to s 124(1)(c) read with s 125(1)(e) of the Insolvency, Restructuring and Dissolution Act 2018 (“IRDA”), the Court has the power to wind up a company on a creditor’s application if the company is unable to pay its debts (at [6]). A company is deemed to be unable to pay its debts under s 125(2)(a) IRDA, if a creditor serves a written demand of the debt “by leaving [it] at the registered office of the company” (at [6]).
And r 68(1) of the Insolvency, Restructuring and Dissolution (Corporate Insolvency and Restructuring) Rules 2020 (“CIR Rules 2020”) sets out the service requirements for winding up applications (at [7]):
“Every winding up application in respect of a company and every affidavit supporting the application (called in this rule the supporting affidavit) must be served on the company at least 7 clear days before the hearing of the application —
(a) by leaving a copy each of the application and the supporting affidavit with any member, officer or employee of the company at the registered office of the company or, if there is no registered office, at the principal or last known principal place of business of the company;
(b) in a case where no member, officer or employee of the company can be found at the registered office or place of business mentioned in sub-paragraph (a) — by leaving a copy each of the application and the supporting affidavit at the registered office or place of business, as the case may be; or
(c) by serving a copy each of the application and the supporting affidavit on any member or members of the company as the Court may direct.”
(emphasis in original)
In other words, “where no member, officer or employee of the company can be found at the registered office”, the winding up application had to be served by leaving a copy of the application and the supporting affidavit at the registered office of the company.
Application to the facts. The defendant’s registered office address was 10 Collyer Quay, #37-50, Ocean Financial Centre, Singapore 049315 (at [9]).
The following were not disputed (at [9]-[10]):
Level 37 of Ocean Financial Centre (“Level 37”) was occupied by “The Executive Centre”, a co-working space.
The statutory demand was left at the reception of “The Executive Centre” located on Level 37 (“the Reception”).
The Reception served all the occupants of “The Executive Centre”.
The dispute was as to how the Cause Papers were served (at [11]).
The claimant said that the Cause Papers were left at the Reception.
The defendant said that they were found in the mailbox for The Executive Centre, located at the basement of the same building.
The High Court, based on the claimant’s evidence, concluded that it was unclear how service of the Cause Papers was effected because (at [12]):
The affidavit of the claimant’s service agent simply said that he had left the Cause Papers at the defendant’s registered address without any further details;
The affidavit did not state that the Cause Papers were left at the Reception, contrary to the claimant’s case advanced at the hearing; and
The endorsement on the originating application exhibited to the affidavit stated that the Cause Papers were served at unit #37-05 (and not #37-50).
The High Court then stated that even if the Cause Papers were left at the Reception, the question of whether the statutory demand and the Cause Papers were left at the defendant’s registered address must still be answered, which fell on the claimant to prove (at [13]).
The claimant argued that it had shown this, arguing that unit #37-50 did not exist, or was not open and accessible to the public, because (at [14]):
The tenant directory of Ocean Financial Centre listed both “The Executive Centre” and the defendant as occupying the same units #37-01/10;
There was no unit #37-50 listed on the directory;
The claimant’s service agent (on a subsequent visit after the issue of service was disputed) asserted that the rooms within “The Executive Centre” were not numbered and there was no unit marked “#37-50”; and
There were no records found for the defendant’s registered address when the claimant conducted an IRAS “Annual Value of Property” search.
However, the High Court found that the claimant had not discharged its burden of proof (at [15] – [19]). Notably, the High Court stated the following (at [17]):
“[The claimant’s service agent] claims he was told … that the Reception serves all the occupants of “The Executive Centre” (which would include the defendant) such that letters addressed to any of the occupants delivered to the Reception, will in turn be handed to the respective occupant. Even if such assistance was provided by “The Executive Centre”, that does not meet the requirement under s 125(2)(a) of the IRDA to serve the Statutory Demand at the defendant’s registered address. Curiously, the claimant did not make any inquiries about the existence or accessibility of unit #37-50, which is the material issue.”
(emphasis added)
So, the Reception’s “assistance” to hand over letters addressed to the respective occupant (even if true) would not have met the statutory requirement of serving the application by leaving a copy at the defendant’s registered address (at [17]). And the High Court placed emphasis on the claimant’s lack of “basic inquiries” with “The Executive Centre”, including whether unit #37-50 existed and was accessible (at [17]-[18]).
Hence, while the High Court noted that the defendant’s evidence was not entirely satisfactory, as the claimant failed to discharge its legal burden to show that service had been effected at the registered address, the evidential burden did not shift to the defendant (at [20]).
The result was that the claimant could not rely on the statutory presumption under s 125(2)(a) IRDA, and the High Court dismissed CWU 87 (at [23]).
Significance. This case is a reminder of the importance of ensuring that the statutory demand and the relevant winding up papers have been properly served in a winding up application. While trite, the burden of proving proper service rests on the applicant.
So, if there are issues involving co-working spaces like that encountered in this case, it is important to note that it would be prudent to ensure that the necessary inquiries are made with the operator of the co-working space to ensure that proper service was, in fact, effected.
Simply leaving the papers with the receptionist may not be sufficient.
This publication is not intended to be, nor should it be taken as, legal advice; it is not a substitute for specific legal advice for specific circumstances. You should not take, nor refrain from taking, actions based on this publication. Chancery Law Corporation is not responsible for, and does not accept any responsibility for, any loss or damage that may arise from any reliance based on this publication.