Administration Of Bankruptcy Law In Singapore (1)

Causes of Bankruptcy may be broken down as follow:

CAUSES OF BANKRUPTCY
Business Failure 31%
Unemployment / Low Income 26%
Overspending / Speculation / Gambling 19%
Liability as Guarantor 12%
Others 12%

BANKRUPTCY INFORMATION PROVIDED BY THE OFFICIAL ASSIGNEE TO THE PUBLIC

- Internet Insolvency Search Service
- bankruptcy search via internet at http://www.minlaw.gov.sg/ipto/ at $6.00(+4% gst) per search

Breakdown of the causes of Insolvency of non-business related bankrupts

Excessive use of credit facilities (eg. credit cards, overdrafts, etc) 70%
Liability as guarantor (egg. vehicle loans, renovation loans, study loans, 8.5%
etc)
Speculation/ gambling 6%
Ill Health 2.6%
Inability to collect debts 2.4%
Criminal breach of trust 0.5%
Cause of insolvency not disclosed 10%

5 OBJECTIVES OF BANKRUPTCY ACT

Obj 1 – reduce instances where parties resort to bankruptcy proceedings

a) see bankruptcy threshold below

b) see juris of court below

c) Pre-Bankruptcy Regime – Voluntary arrangements

- see chart pg 103
- Part V of the BA provides debtors with an avenue to explore debt settlement with their creditors so as to
avoid bankruptcy proceedings. This is achieved by entering into a voluntary arrangement with creditors. The
scheme allows an individual debtor or a firm (if supported by all or a majority of the partners) to make a
proposal for a composition or scheme of arrangement to satisfy their respective claims.
- Voluntary arrangements are not applicable to undisclosed bankrupts.
- Voluntary arrangements are most useful where a debtor has substantial assets and liabilities.

Interim Order s45-48

- Upon an application by the debtor by way of OS, the Court may grant an interim order if it is satisfied that: -
s45(1)
 No partner in an insolvent firm shall apply to the court for an interim order in respect of the
firm unless all or a majority of the partners in the firm join or intend to join in the making of
the proposal for a voluntary arrangement – s45(2)

Interim order of court

45. —(1) Subject to subsection (2), any insolvent debtor who intends to make a proposal to his creditors for a
composition in satisfaction of his debts or a scheme of arrangement of his affairs (referred to hereinafter as a
voluntary arrangement) may apply to the court for an interim order under this Part.
(2) No partner in an insolvent firm shall apply to the court for an interim order in respect of the firm unless all or
a majority of the partners in the firm join or intend to join in the making of the proposal for a voluntary
arrangement.
(3) An interim order shall have the effect that, during the period for which it is in force —
(a) where the interim order is in respect of an individual debtor —
(i) no bankruptcy application may be made or proceeded with against the debtor; and
(ii) no other proceedings, execution or other legal process may be commenced or continued against the person or
property of the debtor without the leave of the court; and
(b) where the interim order is in respect of a firm —
(i) no bankruptcy application may be made or proceeded with against the firm or, except with the leave of the
court, any partner therein; and
(ii) no other proceedings, execution or other legal process may be commenced or continued against the firm or its
property or against the person or property of any partner in the firm, without the leave of the court.
(4) An interim order shall cease to have effect 42 days after the making thereof unless the court otherwise directs.

• The debtor intends to make a proposal for a VA – s48(1)(a)

Conditions for making of interim order

48. —(1) The court shall not make an interim order on an application under section 45 unless it is satisfied that
—
(a) the debtor intends to make a proposal for a voluntary arrangement;
(b) no previous application for an interim order has been made by or in respect of the debtor during the period of
12 months immediately preceding the date of the application; and
(c) the nominee appointed by the debtor’s proposal is qualified and willing to act in relation to the proposal.
(2) The court may make an interim order if it thinks that it would be appropriate to do so for the purpose of
facilitating the consideration and implementation of the debtor’s proposal.

• The nominee appointed by the debtor to supervise the VA is qualified and willing to act; and –
s48(1)(c)
• It would be appropriate to do so to facilitate the consideration and implementation of the debtor’s
proposal. – s48(2)

- This interim orders acts as a stay of all bankruptcy petitions, executions and all legal proceedings against the
debtor – s45(3)(a) or the firm – s45(3)(b).
- The Order is valid for only 42 days unless it is extended. – s45(4)

Nominee – s46
- The nominee must be either an Advocate and Solicitor, a public Ccountant or such other person as the
Minister may prescribe

Nominee
46. —(1) Every debtor making a proposal for the purpose of this Part shall in such proposal appoint a nominee to
act in relation to the voluntary arrangement either as trustee or otherwise for the purpose of supervising its
implementation.
(2) No person shall be appointed as a nominee unless he is —
(a) registered as a public accountant under the Accountants Act (Cap. 2A);
(b) an advocate and solicitor; or
(c) such other person as the Minister may, by order published in the Gazette, prescribe.
(3) The Minister may make rules prescribing the scale of fees to be charged by nominees assisting debtors in
respect of voluntary arrangements.

Debtor’s debt settlement proposals – s49

- Debtor is required to submit to the nominee the terms of the VA he is proposing and a statement of his
assets, liabilities and affairs.

Nominee’s report on debtor’s proposal

49. —(1) Where an interim order has been made, the nominee shall, before the order ceases to have effect,
submit a report to the court stating —
(a) whether, in his opinion, a meeting of the debtor’s creditors should be summoned to consider the debtor’s
proposal; and
(b) if in his opinion such a meeting should be summoned, the date on which, and the time and place at which, he
proposes the meeting should be held.
(2) For the purpose of enabling the nominee to prepare his report, the debtor shall submit to the nominee —
(a) a document setting out the terms of the voluntary arrangement which the debtor is proposing; and
(b) where the debtor is an individual, a statement of his affairs containing —
(i) such particulars of his assets, creditors, debts and other liabilities as may be prescribed; and
(ii) such other information as may be prescribed; or
(c) where the debtor is a firm, a statement of its affairs containing —
(i) such particulars of the assets, creditors, debts and other liabilities of the firm and of each partner therein, as
may be prescribed; and
(ii) such other information as may be prescribed.
(3) Where the nominee has failed to submit the report required by this section within the time given, the court
may, on an application made by the debtor, do one or both of the following:
(a) direct that the nominee shall be replaced by another person qualified to act as a nominee;
(b) direct that the interim order shall continue, or if it has ceased to have effect be renewed, for such further
period as the court may think fit.
(4) The court may, on the application of the nominee, extend the period for which the interim order has effect so
as to allow the nominee to have more time to prepare his report.
(5) If the court is satisfied on receiving the nominee’s report that a meeting of the debtor’s creditors should be
summoned to consider the debtor’s proposal, the court shall direct that the period for which the interim order has
effect shall be extended for such further period as it may think fit, for the purpose of enabling the debtor’s
proposal to be considered by the debtor’s creditors in accordance with the following provisions of this Part.
(6) The court may discharge the interim order if it is satisfied, on the application of the nominee —
(a) that the debtor has failed to comply with subsection (2); or
(b) that for any other reason it would be inappropriate for a meeting of the debtor’s creditors to be summoned to
consider the debtor’s proposal.

Nominee’s report and Creditors’ Meeting – s49-54

- Nominee will report to the Court as to whether a creditors’ meeting should be convened to consider the
debtor’s proposals – s49(1)(a)
- If in his opinion such a meeting should be summoned, the date on which, and the time and place at which,
he proposes the meeting should be held – s49(1)(b)
- If Court is satisfied that such a meeting should be convened, it will extend the validity of the interim order –
s49(5)

Summoning of creditors’ meeting

50. —(1) Where a nominee has reported to the court under section 49 that a meeting of the debtor’s creditors
should be summoned, the nominee shall, unless the court otherwise directs, summon that meeting in accordance
with his report.
(2) The nominee shall summon to the meeting every of the debtor’s creditors of whose claim and address he is
aware.

Consideration and implementation of debtor’s proposal

Decision of creditors’ meeting
51. —(1) A creditors’ meeting summoned under section 50 may, if the meeting thinks fit, by special resolution
resolve to approve the proposed voluntary arrangement, whether with or without modification.
(2) The meeting shall not approve the proposed voluntary arrangement with any modification unless the debtor
has consented to such modification.
(3) For the purpose of this section, a modification subject to which a proposed voluntary arrangement may be
approved by a creditors’ meeting may confer the functions proposed to be conferred on the nominee on another
person qualified to act as a nominee.
(4) No modification under subsection (3) shall alter the proposal to such an extent that it ceases to be a proposal
for a voluntary arrangement by the debtor.
(5) The meeting shall not approve any proposal or any modification thereto which affects the right of a secured
creditor of the debtor to enforce his security, except with the concurrence of the secured creditor concerned.
(6) The meeting shall not, without the concurrence of the preferential creditor concerned, approve any proposal
or any modification thereto under which —
(a) any debt of the debtor, not being a preferential debt, is to be paid in priority to any preferential debt of the
debtor; or
(b) any preferential debt of the debtor is to be paid in relation to any other preferential debt of the debtor other
than in accordance with section 90.
(7) Every meeting shall be conducted in accordance with the prescribed rules.
(8) Any debtor who makes any false representation or commits any other fraud for the purpose of obtaining the
approval of his creditors to a proposal for a voluntary arrangement shall be guilty of an offence and shall be
liable on conviction to a fine not exceeding $10,000 or to imprisonment for a term not exceeding 2 years or to
both.
Report of decisions to court
52. —(1) After the conclusion of the creditors’ meeting summoned under section 50, the nominee shall report the
result thereof to the court and shall serve a copy of the report on such persons as may be prescribed.
(2) Where the meeting has declined to approve the debtor’s proposal, the court may discharge any interim order
which is in force in relation to the debtor.
Effect of approval
53. —(1) Where the creditors’ meeting summoned under section 50 has approved the proposed voluntary
arrangement, whether with or without modifications, the approved arrangement shall —
(a) take effect as if made by the debtor at the meeting; and
(b) bind every person who had notice of and was entitled to vote at the meeting, whether or not he was present or
represented thereat, as if he were a party to the arrangement.
(2) Subject to section 54, the interim order in force in relation to the debtor shall cease to have effect at the end of
28 days from the date the report was made to the court under section 52.
(3) Where proceedings on a bankruptcy application have been stayed by an interim order which ceases to have
effect under subsection (2), that application shall, unless the court otherwise orders, be deemed to have been
dismissed.
Review of meeting’s decision
54. —(1) Any debtor, nominee or person entitled to vote at a creditors’ meeting summoned under section 50 may
apply to the court for a review of the decision of the meeting on the ground that —
(a) the voluntary arrangement approved by the meeting unfairly prejudices the interests of the debtor or any of
the debtor’s creditors; or
(b) there has been some material irregularity at or in relation to the meeting.
(2) Upon hearing an application under subsection (1), the court may, if it thinks fit, do one or both of the
following:
(a) revoke or suspend any approval given by the meeting;
(b) direct any person to summon a further meeting of the debtor’s creditors to consider any revised proposal the
debtor may make or, in a case falling within subsection (1) (b), to reconsider the original proposal of the debtor.
(3) No application under this section shall be made after 28 days from the date the report was made to the court
under section 52.
(4) Where at any time after giving a direction under subsection (2) (b) for the summoning of a meeting to
consider a revised proposal the court is satisfied that the debtor does not intend to submit such a proposal, the
court shall revoke the direction and revoke or suspend any approval given at the previous meeting.
(5) Upon giving a direction under subsection (2) (b), the court may, if it thinks just, extend the validity of any
interim order in relation to the debtor for such period as it may think fit.
(6) Upon giving a direction or revoking or suspending an approval under this section, the court may give such
supplemental directions as it may think fit and, in particular, directions with respect to —
(a) things done since the meeting under any voluntary arrangement approved by the meeting; and
(b) such things done since the meeting as could not have been done if an interim order had been in force in
relation to the debtor when they were done.
(7) Except in pursuance of this section, no approval given at a creditors’ meeting summoned under section 50
shall be invalidated by reason only of any irregularity at or in relation to the meeting.
Implementation and supervision of approved voluntary arrangement
55. —(1) Where a voluntary arrangement approved by a creditors’ meeting summoned under section 50 has
taken effect, the nominee shall supervise the implementation of the voluntary arrangement.
(2) If the debtor or any of his creditors is dissatisfied by any act, omission or decision of the nominee in his
supervision of the implementation of the voluntary arrangement, the debtor or creditor may apply to the court to
review that act, omission or decision.
(3) On hearing an application under subsection (2), the court may —
(a) confirm, reverse or modify any act or decision of the nominee; or
(b) give such directions to the nominee or make such order as it thinks fit.
(4) The nominee may apply to the court for directions in relation to any particular matter arising under the
voluntary arrangement.
(5) The court may, whenever —
(a) it is expedient to appoint a person to carry out the functions of the nominee; and
(b) it is inexpedient, difficult or impracticable for such an appointment to be made without the assistance of the
court,
make an order appointing a person who is qualified to act as a nominee, either in substitution for the existing
nominee or to fill a vacancy.

- After the creditors’ meeting, the nominee will report to the Court as to whether the debtor’s proposal has
been approved by the creditors – s52(1)

- If the proposal is approved by the creditors, the nominee will proceed to implement it – s53(1)(a) The
creditors as well as the nominee may bring bankruptcy proceedings against the debtor if he subsequently
fails to comply with the terms for a proposal which has been approved by the creditors. IF the proposal is
successfully implemented y the nominee, the debtor will have effectively avoided bankruptcy.

- If proposal is not approved, the interim order will be discharged and the creditors will be at liberty to
proceed against the debtor – s52(2)

ROLE OF THE OFFICIAL ASSIGNEE

- Administration of individual insolvencies as trustee in bankruptcy and to balance the interests of creditors,
bankrupt and the public;
- Assist creditors in recovering debts;
- Assist bankrupts to obtain discharge from bankruptcy;
S125 Bankruptcy Act – Through a certificate of discharge or Application for discharge.
Discharge by certificate of Official Assignee
125. —(1) The Official Assignee may, in his discretion and subject to section 126, issue a certificate
discharging a bankrupt from bankruptcy.
(2) The Official Assignee shall not issue a certificate discharging a bankrupt from bankruptcy under
subsection (1) unless —
(a) a period of 3 years has lapsed since the date of commencement of the bankruptcy; and
(b) the debts which have been proved in bankruptcy do not exceed $500,000*, or such other sum as may
be prescribed.
*see — Bankruptcy (Variation of Sum of Debts under section 125 (2) (b)) Rules 1999 (S 126/99).
(3) Notice of every discharge under subsection (1) shall be given to the Registrar and be published in the
Gazette and advertised in any local newspaper.
(4) The Official Assignee shall, upon the application of a bankrupt or his creditor or other interested
person, issue to the applicant a copy of the certificate of discharge upon the payment of the prescribed fee.

- And Assist the community in dealing with the impact of individual and corporate financial failure.
• “Corporate financial failure” refers to insolvent winding up of companies
• Interest of banker and creditor may be quite different
• Creditor wants money back
• Bankrupts want to avoid paying their debts – clash of interests

- Perform bankruptcy administration

- • Determine ownership, recovery and realisation of bankrupts’ assets for distribution to creditors
• Includes attending court to represent the bankrupt’s estate in interpleaders

- • Administer bankrupts’ outstanding legal suits and affairs

• Bankrupt’s statement of affairs – deals with his assets and liabilities, etc
• in many cases lawsuits wld have started before bankruptcy and stil in middle of lawsuit
when bankruptcy occurs
• so there will be goodie in dissolving lawsuits
- • Prosecute errant bankrupts who breach their duties and obligations under the Bankruptcy Act
 • This would entail investigations into the affairs, and even to examine the complainant or
3rd parties to the financial transactions, or even apply to issue warrants of arrest
- • Adjudicate creditors’ claims by determining liability and amount
- • Mediate between bankrupts & creditors to achieve debt settlement
- • Attend High Court hearings for purpose of discharging bankrupts from bankruptcy
• hearings held in supreme court registry (on Thursdays at 9am)
- • Assist the Court as amicus curiae in matters concerning bankruptcy law and procedure
• neutral party – official assignee
• court requires them to turn up and assist
• where the Court requires interpretation of the Bankruptcy Act and Rules by an
independent 3rd party, the OA will be called in.
• E.g. where the bankrupt appeals against a bankruptcy holding by the Assistant Registrar.
- • Review and amend legislation, policies and procedures
• official assignee department has cycle of review for obsolete procedures and see whether
new changes can be put into fact
- • Decide whether to sanction any action that the bankrupt wishes to commence or proceed with,
upon analysing the merits of the case and the costs involved (see s.131(1)(a), s.165(5) of the Act)

Disabilities of bankrupt
131. —(1) Where a bankrupt has not obtained his discharge —
(a) he shall be incompetent to maintain any action, other than an action for damages in respect of
an injury to his person, without the previous sanction of the Official Assignee; and
(b) he shall not leave, remain or reside outside Singapore without the previous permission of the
Official Assignee.
(2) A bankrupt who fails to comply with this section shall be guilty of an offence and shall be liable on
conviction to a fine not exceeding $10,000 or to imprisonment for a term not exceeding 2 years or to
both.

Insolvency Assistance Fund

165. —(1) The Official Assignee shall maintain and administer a fund to be known as the Insolvency
Assistance Fund (referred to in this section as the Fund) in accordance with such rules as may be
prescribed.
(2) There shall be paid into the Fund —
(a) all unclaimed moneys referred to in section 164 (3); and
(b) all costs and fees recovered by the Official Assignee in any proceedings taken under this Act in
which moneys from the Fund were applied.
(3) Subject to subsections (4) and (6), the Fund may be applied by the Official Assignee for all or any of
the following purposes:
(a) for the remuneration of special managers appointed under section 113;
(b) for the payment of all costs, fees and allowances to solicitors and other persons in proceedings on
behalf of a bankrupt’s estate or to recover assets of the estate;
(c) for the payment of such costs and fees in the administration of a bankrupt’s estate as the Official
Assignee may determine;
(d) for such other purposes as may be prescribed.
(4) If any claimant makes any demand against the Official Assignee for any amount of unclaimed
moneys paid into the Fund under subsection (2) (a), the Minister may direct that payment of that
amount, free of interest, be made to the claimant out of the Consolidated Fund.
(5) No moneys from the Fund shall be applied for any proceedings where, in the opinion of the
Official Assignee, there is no reasonable ground for taking, defending, continuing or being a party
to the proceedings or where there are sufficient moneys for such purpose in the bankrupt’s estate.
(6) The Minister may from time to time pay such sums of moneys in the Fund into the Consolidated
Fund as he may determine.

 impt
 when official assignee finds out wil put stop
  to ensure that the assets of the bankrupt are not dissipated towards unfruitful
ventures
 difficult to lawyer –
• lawsuit stops in its tracks – official assigne wants security in terms of costs
upfront and may amt to quite a lot, s party suing (already bankrupt) will
need to find third party to provide security in osts; if not provided then
lawsuit may be dismissed
• and imptly, whoeve lawyer representing feels tt not represented properly –
may comploain tt lawyer neg in advising him
 => so if client bankrupt/proceeding against bankrupt – must have relevant security
ready
• • Attend Court at hearings of appeals or applications by bankrupt and third parties against any
decision or act of the Official Assignee (see s.31 of the Act)
 whether to admit or refuse
 decisions can be appealed against
 OA asked to appear in court to defend decision
 Judge in HC will adjudicate.

Review by court of Official Assignee’s act, omission or decision

31. —(1) If a bankrupt or any of his creditors or any other person is dissatisfied by any act, omission or
decision of the Official Assignee in relation to the Official Assignee’s administration of the bankrupt’s
estate, he may apply to the court to review such act, omission or decision.
(2) On hearing an application under subsection (1), the court may —
(a) confirm, reverse or modify any act or decision of the Official Assignee; or
(b) give such directions to the Official Assignee or make such other order as it may think fit.
(3) The Official Assignee may apply to the court for directions in relation to any particular matter
arising under the bankruptcy.

PETITION FOR BANKRUPTCY

- There are 2 types of bankruptcy petitions:
• Creditor’s petition (Section 57) – more common
• Debtor’s petition (Section 58) – self petition; usu ccurs when person cannot stand it anymore
and wnts bankruoptcy prxtn and so applies for this. Once petition successful ->

Persons who may make creditor’s bankruptcy application

57. —(1) Subject to this Part, a creditor’s bankruptcy application may be made —
(a) against an individual by —
(i) one of the individual’s creditors or jointly by more than one of them; or
(ii) the nominee supervising the implementation of, or any person (other than the individual) who is for the time
being bound by, a voluntary arrangement proposed by the individual and approved under Part V; or
(b) against a firm by —
(i) one of the firm’s creditors or jointly by more than one of them, if such creditor or creditors are entitled under
paragraph (a) (i) to make a creditor’s petition against any one of the partners in the firm in respect of a
partnership debt; or
(ii) the nominee supervising the implementation of, or any person (other than the partners in the firm) who is for
the time being bound by, a voluntary arrangement proposed by the firm and approved under Part V.
(2) A creditor who is entitled to make a bankruptcy application against a firm under subsection (1) (b) may make
a bankruptcy application against any of the partners in the firm without including the others.
(3) Every creditor’s bankruptcy application shall be in the prescribed form and shall be supported by an affidavit
of the creditor or of some person on his behalf having knowledge of the facts.
(4) Every creditor’s bankruptcy application shall be served in the manner prescribed.

Persons who may make debtor’s bankruptcy application

58. —(1) Subject to this Part, a debtor’s bankruptcy application may be made —
(a) against an individual debtor by the debtor himself; or
(b) against a firm by all the partners in the firm or by a majority of such partners who are residing in Singapore at
the time of the making of the application.
(2) A debtor’s bankruptcy application shall be in the prescribed form and shall be supported by an affidavit to
which is exhibited —
(a) where the debtor is an individual, a statement of his affairs containing such particulars of his assets, creditors,
debts and other liabilities as may be prescribed;
(b) where the debtor is a firm, a statement of —
(i) the firm’s affairs containing such particulars of its assets, creditors, debts and other liabilities as may be
prescribed; and
(ii) the affairs of each of the partners in the firm by whom the application is made containing such particulars of
his assets, creditors, debts and other liabilities as may be prescribed; and
(c) a statement containing such other information as may be prescribed

Prima facie rule of OA as trustee may be varied

- When a debtor is made a bankrupt by the Court, the Official Assignee will administer his affairs in
bankruptcy unless the petitioner requests that a private trustee be appointed in place of the Official Assignee
(Section 33).
o (latter rare, usu occurs when debtor has a lot of overseas assets, so want private trustee. But
this is very expensive

Appointment of person other than Official Assignee as trustee in bankruptcy

33. —(1) The court may —
(a) on making a bankruptcy order; and
(b) on the application of the creditor who applied for the bankruptcy order,
appoint a person other than the Official Assignee to be the trustee of the bankrupt’s estate.
(2) The official name of the trustee shall be —
(a) “the Trustee of the estate of (name of bankrupt), a Bankrupt”; or
(b) “the Trustee in Bankruptcy of (name of bankrupt), a Bankrupt”.

Qualifications of a Trustee in Bankruptcy - s34

- A private trustee can be either a certified Public Accountant or a Solicitor or any person as prescribed by
the Minister (Section 34).
- In addition, must not be a person who has been convicted for a crime of dishonesty punishable with
imprisonment of more than 3 months [s34 - BA]
- Petitioning creditors must obtin consent of person to be appted as trustee
- S35 – private trustee reqd to furnish security to satisfaction of fofical assignee before commencing to act;
failure to comply is offence punishable on conviction by fine not exceeding 10,000

Qualifications for appointment as trustee

34. No person shall be appointed as a trustee in bankruptcy unless he satisfies the court that —
(a) he is —
(i) registered as a public accountant under the Accountants Act (Cap. 2A);
(ii) an advocate and solicitor; or
(iii) such person as the Minister may, by order published in the Gazette, prescribe; and
(b) he has not been convicted of an offence involving fraud or dishonesty punishable on conviction by
imprisonment for 3 months or more,
and he has consented in writing to being appointed as a trustee.

- S36.1 – private trustee to have fn and duties and ex powers of official assignee
- Powers include
• Delegation of powers and fn by official trustee s19
• Power to administer oaths s24
• Power to seize bankrupt’s assets s108
• Power to appt special manager s113
• Power to impound bankrupts’ passports s116
• Discharge of bankrupt[ buy certi of officval assignee s125
 • Power to annul bankruptcy order by cert of annulment where creditor has approved debt settm
proposal by special resoln s95A
• Powwr to annul bankruptcy order by cert of annulment when bankrupt has paid debts of
creditors in full s123A
• Use of insolvency assistance fund s165

General functions, duties and powers of trustee

36. —(1) Subject to subsection (3) and section 39, a trustee shall —
(a) have all the functions and duties of the Official Assignee in relation to the conduct of a bankrupt and the
administration of his estate as provided in this Act; and
(b) exercise all the powers of the Official Assignee.
(2) Any reference in this Act or the rules to the Official Assignee shall, unless the context otherwise requires,
include a reference to a trustee.
(3) Sections 19, 24, 95A, 108, 113, 116, 123A, 125 and 165 shall not apply to a trustee and section 112 (a), (c),
(f), (h) and (i) shall not apply to a trustee except with the consent of the court, the creditors’ committee or, if there
is no creditors’ committee, the Official Assignee.

- Powers of official assignee which x apply to private trustee except with consent of court, creditors’
committee or official assignee or official assignee (where no creditors’ committee) –
o S112a – carrying on business of bankrupt
o S112c – employing advocate and solicitor for legal proceedings or business purpose
o S112f – referring of disputes to arbitration or compromising of debts
o S112h – compromising of claims in relation to bankrupt’s property
o S112i – dividing property amongst creditors in existing form without first realizing it
- Section 38 – scheme for determination of trustee’s remuneration
- S39 – subj private trustee to control of official assignee who may apply to court for removal of trustee based
on investigation made under section

General powers of Official Assignee

112. The Official Assignee may exercise any of the following powers:
(a) carry on any business of the bankrupt so far as is necessary for winding it up beneficially;
(b) bring, institute or defend any action or legal proceedings relating to the property of the bankrupt;
(c) employ an advocate and solicitor to take any proceedings or do any business;
(d) accept, as the consideration for the sale of any property of the bankrupt, a sum of money payable at a future
time, subject to such stipulations as to security or otherwise as he thinks fit;
(e) mortgage or pledge any part of the property of the bankrupt for the purpose of raising money for the payment
of his debts;
(f) refer any dispute to arbitration, or compromise all debts, claims and liabilities, whether present or future,
certain or contingent, liquidated or unliquidated, subsisting or supposed to subsist, between the bankrupt and any
person who may have incurred any liability to the bankrupt, on the receipt of such sums payable at such times,
and generally on such terms as are agreed on;
(g) make such compromise or other arrangement as is thought expedient with creditors or persons claiming to be
creditors in respect of any debts provable under the bankruptcy;
(h) make such compromise or other arrangement as is thought expedient with respect to any claim arising out of
or incidental to the property of the bankrupt, made or capable of being made on the Official Assignee by any
person or by the Official Assignee on any person; and
(i) divide in its existing form, amongst the creditors according to its estimated value, any property which from its
peculiar nature or other special circumstances cannot be readily or advantageously sold.
Remuneration of trustee
38. —(1) A trustee shall be entitled to receive such salary or remuneration as is determined in the following
manner:
(a) by agreement between the trustee and the creditors’ committee, if any;
(b) failing any agreement with the creditors’ committee or where there is no such committee, by a special
resolution of the creditors whose debts have been admitted for the purpose of voting and who are present in
person or by proxy and voting at a meeting to be convened by the trustee by a notice to each creditor in
accordance with subsection (2); or
(c) failing a determination in the manner referred to in paragraph (a) or (b), by the court.
(2) The trustee shall attach to every notice under subsection (1) (b) a statement of all receipts and expenditure by
the trustee and the amount of remuneration sought by him.
Control of trustee by Official Assignee
39. —(1) The Official Assignee shall take cognizance of the conduct of a trustee in the administration of the
estate of a bankrupt.
(2) If the trustee does not faithfully perform his duties or duly observe all the requirements imposed on him by
this Act, the rules or any other written law with respect to the performance of his duties, or if any complaint is
made to the Official Assignee by any creditor or bankrupt in regard thereto, the Official Assignee shall inquire
into the matter and take such action thereon as he may think expedient.
(3) The Official Assignee may —
(a) at any time require a trustee to answer any inquiry in relation to his administration of the estate of a bankrupt;
and
(b) also direct an investigation to be made of the books and vouchers of the trustee.
(4) It shall be the duty of the trustee —
(a) to furnish the Official Assignee with such information;
(b) to produce to the Official Assignee, and permit inspection by the Official Assignee of, such books, papers and
other records; and
(c) to give the Official Assignee such other assistance,
as the Official Assignee may reasonably require for the purpose of enabling him to carry out his functions in
relation to the bankruptcy.
(5) The Official Assignee may, having regard to the results of any inquiry or investigation made under this
section, apply to the court for the removal of the trustee.

Jurisdiction of the Court to hear bankruptcy petition

Pursuant to s3 of the Bankruptcy Act, a bankruptcy petition will be heard by the HC
- first by the Registrar
- then on appeal, to a judge in chambers
- this is necessitated because of the drastic change/ repercussion of granting of bankruptcy order

High Court to be the court having jurisdiction in bankruptcy

3. Subject to any other written law, the High Court shall be the court having jurisdiction in bankruptcy under this
Act.

WHO MAY PRESENT BANKRUPTCY PETITION?

- Section 57 Bankruptcy Act - Persons who may present creditor’s petition (includes joint petition by 2 or
more creditors)
• Costs involved in presenting this
• Stimes diff to recover
• 2 or more creditors may decide to put jt petition therefore
• less common
• more common – one creditor (main )doing all the work and other creditors turning up to give
moral support (not monetary!)

- Section 58 Bankruptcy Act - Persons who may present debtor’s petition (Statement of Affairs of his assets,
liabilities, creditors etc must also be filed together with the petition)
• Someone filing on his own – he has to provide all these documents upfront

CREDITOR’S PETITION
- Section 57 Bankruptcy Act
- S57 BA: Persons who may present creditor’s petition (includes joint petition by 2 or more creditors)
- S58 BA: Persons who may present debtor’s petition (Statement of Affairs of his assets, liabilities, creditors
etc must also be filed)
- May be presented by :
- one of the debtor’s creditors [s57(1)(a)(i)]; or
- jointly be more than one of them[s57(1)(a)(i)]; or
 - the nominee supervising the implementation of the voluntary arrangement proposed by the
debtor [s57(1)(a)(ii)]
 not tt common
 bu in event tt bankruptcy act allows for vol arrangement - debtor may say want to
pay up and arrangements may be set up and nominee then supervises agreement
- NB: Debtor may be an individual or a firm comprising one or more partners [see s57(1)(b)]

“Voluntary arrangement” found in Part V of the BA, this is technically not a bankruptcy, but before the
stage of bankruptcy
- where a debtor is of the opinion that the creditors are pushing him too hard, and does not want to be a
bankrupt, can rely on the procedure of Part V, to have a payment obligations set out
- this requires the consent of ALL the creditors in general meeting, where nominee will be nominated
- if the debtor runs foul of the conditions of payment, then the nominee can present the petition
- see above

Administrative matters relating to the Creditor’s petition

- •A creditor’s petition must be in the prescribed form (Form 2-Rule 99)

Form of creditor’s bankruptcy application

99. —(1) Every creditor’s bankruptcy application shall be made in Form 2.
(2) For the purposes of such an application and all proceedings thereunder —
(a) the plaintiff shall be the creditor making the bankruptcy application; and
(b) the defendant shall be the debtor in respect of whom the bankruptcy application is made.

- •Affidavit of Truth of Statements in Bankruptcy Petition (Form 3/4 - Rule 106) –

• affidavit verifying application done by creditor or someone supervising bankruptcy
• For affidavit verifying truth… have to be filed within 4 days from the filing of petition in the
HC
• Cannot affirm this affidavit before filing of the petition; has to be AFTER the filing of the
petition

Form of affidavit
106. —(1) The affidavit supporting a creditor’s bankruptcy application shall be in Form 3 or 4, as appropriate,
and shall be filed at the same time as the creditor's bankruptcy application.
(2) The affidavit shall be made by the applicant creditor or by another person on his behalf.

- •Affidavit of Service of Statutory Demand exhibiting the Statutory Demand (Rule 102)
• if the petition is presented based on statutory demand, then the petition to be accompanies by
the demand and a affidavit of service verifying service of the LD
• A statutory demand serves as evidence of inability to pay debt. Therefore it must be served
personally (if not seek leave of court to effect substituted service).
• Check that all particulars are correct!

Bankruptcy application based on statutory demand

102. —(1) Where the creditor’s bankruptcy application is based on a statutory demand, the affidavit supporting
the application shall state the date and manner of service of the statutory demand and that to the best of the
creditor’s knowledge and belief, the demand has neither been complied with nor set aside and that no application
to set it aside is pending.
(2) The application shall not be made if the statutory demand was served more than 4 months before the date of
filing of the application.

- •Deposit of S$1,600 (Rule 105)

• This is to off-set the administrative charges of the OA
• deposited to allow OA to do sth abt bankruptcy case
• must have some money to start off administration
Deposit payable to Official Assignee
105. —(1) A creditor making a bankruptcy application shall file 2 copies of the application and the supporting
affidavit in court, inclusive of the copy to be served on the Official Assignee, together with the deposit payable to
the Official Assignee of such sums as are prescribed by the Bankruptcy (Fees) Rules (R 3).
(2) Upon the filing of 2 copies of the creditor’s application and the supporting affidavit under paragraph (1), the
application and affidavit shall be deemed to have been served on the Official Assignee.
(3) Where a creditor’s bankruptcy application has been filed under paragraph (1), the Official Assignee may,
from time to time, require the applicant creditor to deposit with the Official Assignee such further sums as may
be required by the Official Assignee, whether before or after the making of the bankruptcy order, to cover the
fees and expenses incurred by the Official Assignee in connection with the application.

- •Affidavit of Service of Bankruptcy Petition (Rule 109 & Section 65(1)(b))

• This is because the section 65(1)(b) provides that the Court shall not on hearing a creditor’s
petition make BO unless satisfied that if the debtor does not appear at the hearing, the petition
has been duly served on him
• See Rule 109: Bankruptcy must be served personally on the debtor
 It is not good service to simply leave it at his last known address
 If you are not able to effect personal service, then rule 110 allows substituted
service… but court’s leave must have been obtained.
 Have to convince the Registrar that the substituted service is sufficient to bring the
petition to the notice of the debtor
• Can stick on door of last known address
 Can put in newspapers: must also be a paper that the debtor reads e.g. Malay
debtor… will usually print it in the Malay papers and the Straits Times

Personal service on individual debtor

109. Subject to rule 111, a creditor’s bankruptcy application and its supporting affidavit shall be served
personally on the debtor at the same time by an officer of the court, or by the applicant creditor or his solicitor, or
by a person in their employment, and service shall be effected by delivering a sealed copy of the application
together with its supporting affidavit to the debtor.
Personal service on firm
110. Subject to rule 111, where the creditor’s bankruptcy application is against a firm, personal service of the
application shall be deemed to have been effected on all the partners in the firm if the application and its
supporting affidavit are served together at the principal place of business of the firm in Singapore on any one of
the partners, or on any person having at the time of service control or management of the business of the firm
thereat.
Substituted service
111. —(1) If the court is satisfied by affidavit or other evidence on oath that prompt personal service cannot be
effected because the debtor is keeping out of the way to avoid service of a creditor’s bankruptcy application, or
for any other cause, the court may order substituted service to be effected in such manner as it thinks fit.
(2) If the debtor is not in Singapore, the court may order service to be made within such time and in such manner
and form as it thinks fit.
(3) Where an order for substituted service has been carried out, the bankruptcy application shall be deemed to
have been duly served on the debtor.

- •Affidavit of Non-Satisfaction of Debt (Section 65(1)(a))

• This is because the section provides that the Court shall not on hearing a creditor’s petition
make BO unless satisfied that the debts in respect of which the petition has neither been paid,
secured nor compounded for
• ==> in practice, it is better to have both affidavit of service and affidavit of non-satisfaction
because you do not know whether the debtor may turn out in court

Proceedings on creditor’s bankruptcy application

65. —(1) The court hearing a creditor’s bankruptcy application shall not make a bankruptcy order thereon unless
it is satisfied that —
(a) the debt or any one of the debts in respect of which the application is made is a debt which, having been
payable at the date of the application, has neither been paid nor secured or compounded for; and
(b) where the debtor does not appear at the hearing, the application has been duly served on him.

- ie four affidavits to file

Objective 4 – encourage creditors to take greater interest in bankruptcy administration

a) trustee in bankruptcy
- creditors can apply to court for private trustee to be aptped to administer bnkrptcy estate
- part IV
o see lsit of such persons s34
- s33 – analogous role to private liquidator in companies liquidation cases

b) creditors’ committee
- creditors can appt creditors’ committee comprising up to 3 creditors to advise OA on matters relating to
admin of property

DEBTOR’S PETITION (self petition)

- Section 58 Bankruptcy Act
• • Debtor may be an individual : the debtor may present a petition against himself
• • Debtor may also be a firm : all partners of the firm or a majority of them who are residing in
Singapore may present a petition against their firm
 if private limited, then goes under diff set of rules (winding up) under companies
act!! Note!!!!

58. —(1) Subject to this Part, a debtor’s petition may be presented —

(a) against an individual debtor by the debtor himself; or
(b) against a firm by all the partners in the firm or by a majority of such partners who are residing in Singapore at
the time of the presentation of the petition.

Difference between creditor’s and debtors petition

- Statement of Affairs has to be filed
- In this Statement of Affairs, it is for the debtor to tell the court what are his assets, who are his creditors

Nominee’s report on debtor’s proposal

49. —(1) Where an interim order has been made, the nominee shall, before the order ceases to have effect,
submit a report to the court stating —
(a) whether, in his opinion, a meeting of the debtor’s creditors should be summoned to consider the debtor’s
proposal; and
(b) if in his opinion such a meeting should be summoned, the date on which, and the time and place at which, he
proposes the meeting should be held.
(2) For the purpose of enabling the nominee to prepare his report, the debtor shall submit to the nominee
—
(a) a document setting out the terms of the voluntary arrangement which the debtor is proposing; and
(b) where the debtor is an individual, a statement of his affairs containing —
(i) such particulars of his assets, creditors, debts and other liabilities as may be prescribed; and
(ii) such other information as may be prescribed; or
(c) where the debtor is a firm, a statement of its affairs containing —
(i) such particulars of the assets, creditors, debts and other liabilities of the firm and of each partner therein, as
may be prescribed; and
(ii) such other information as may be prescribed.
(3) Where the nominee has failed to submit the report required by this section within the time given, the court
may, on an application made by the debtor, do one or both of the following:
(a) direct that the nominee shall be replaced by another person qualified to act as a nominee;
(b) direct that the interim order shall continue, or if it has ceased to have effect be renewed, for such further
period as the court may think fit.
(4) The court may, on the application of the nominee, extend the period for which the interim order has effect so
as to allow the nominee to have more time to prepare his report.
(5) If the court is satisfied on receiving the nominee’s report that a meeting of the debtor’s creditors should be
summoned to consider the debtor’s proposal, the court shall direct that the period for which the interim order has
effect shall be extended for such further period as it may think fit, for the purpose of enabling the debtor’s
proposal to be considered by the debtor’s creditors in accordance with the following provisions of this Part.
(6) The court may discharge the interim order if it is satisfied, on the application of the nominee —
(a) that the debtor has failed to comply with subsection (2); or
(b) that for any other reason it would be inappropriate for a meeting of the debtor’s creditors to be summoned to
consider the debtor’s proposal.

- Cf: in creditors’ petition where this does not have to be filed because once the court makes bankruptcy order,
the debtor will have to disclose all his assets
- This is an essential procedure because the court does not want people to hide behind bankruptcy

5 requirements for self petition:

- A debtor’s petition must be in the prescribed form (Form 9 - Rule 134)
Form of bankruptcy application
134. —(1) A debtor’s bankruptcy application shall be made in Form 9 and the affidavit supporting the application
shall state —
(a) his name as it appears in his identity card or passport;
(b) the number of his identity card or passport;
(c) any other name or names by which he is or was known or by which he carries or has carried on any business;
(d) his residential address;
(e) his occupation and monthly income; and
(f) the nature of his business and the address at which he carries on such business, and whether he carries on the
business alone or with others.
(2) Where a debtor’s bankruptcy application is filed by a firm in the firm’s name, the affidavit supporting the
application shall state —
(a) the name, the number of the identity card or passport, the residential address, the occupation and the monthly
income, of each of the partners in the firm;
(b) whether all the partners concur in the filing of the application;
(c) the names of the partners who do not concur in the filing of the application;
(d) the nature of the business of the firm;
(e) the number of the certificate of the registration of the firm under the Business Registration Act (Cap. 32); and
(f) where any of the partners in the firm carries on any business separately, the nature of such business and the
address at which it is carried on, and whether he carries on the business alone or with others.
(3) Where the bankruptcy application is filed by an individual debtor, the full title of the proceedings shall be
determined by the particulars of the debtor specified in paragraph (1) (a), (b) and (c).
(4) Where the bankruptcy application is filed by a firm in the firm’s name, the full title of the proceedings shall
include the name of the firm as well as the names and numbers of the identity cards or passports, of all the
partners in the firm.
(5) The debtor shall explain in his affidavit how the conditions and grounds specified in sections 60 and 61,
respectively, of the Act for the filing of a bankruptcy application have been satisfied.
- Affidavit of Truth of Statements in Bankruptcy Petition (Form 10 - Rule 136)
Verification of application
136. The affidavit supporting a debtor’s bankruptcy application shall be in Form 10.
- Filing of Statement of Affairs & Affidavit verifying Statement of Affairs (Form 11/12 - Rule 137)
Form 11 – Statement of Affairs
Form 12 – Affidavit Verifying Statement of Affairs

Statement of affairs
137. —(1) A debtor’s bankruptcy application shall be filed in court together with a statement of affairs in Form
11.
(2) The statement of affairs shall be verified by an affidavit in Form 12.
- Deposit of S$1,600 (Rule 138)

Procedure for filing of debtor’s bankruptcy application

138. —(1) The debtor who files his own bankruptcy application shall file 2 copies each of the bankruptcy
application, the supporting affidavit and the statement of affairs in court, inclusive of the copies to be served on
the Official Assignee, together with the deposit payable to the Official Assignee of such sums as are prescribed
by the Bankruptcy (Fees) Rules (R 3).
(2) Upon the filing of 2 copies each of the debtor’s bankruptcy application, affidavit and statement of affairs
under paragraph (1), the application, affidavit and statement of affairs shall be deemed to have been served on the
Official Assignee.
(3) Where a debtor’s bankruptcy application, affidavit and statement of affairs have been filed under paragraph
(1), the Official Assignee may, from time to time, require the debtor to deposit with the Official Assignee such
further sums as may be required by the Official Assignee, whether before or after the making of the bankruptcy
order, to cover the fees and expenses incurred by the Official Assignee in connection with the debtor’s
bankruptcy application.
(4) Where the debtor is a wage-earner, the deposit payable under paragraph (1) may be reduced or waived at the
discretion of the Official Assignee.

- Service of Bankruptcy Petition & Statement of Affairs (Rules 139 & 140) – msut show tt has been
served on the requisite parties
- Have to serve on the relevant parties
o E.g. when at the date of debtor’s petition, there is a voluntary arrangement in force … and he
feels that he cannot pay as per agreed
o The debtor can file against himself, but must serve it on the nominees

Service of debtor’s bankruptcy application on nominee supervising voluntary arrangement and partners
of debtor
139. —(1) Where the debtor’s bankruptcy application is filed by the debtor at a time when a voluntary
arrangement under Part V of the Act is in force between himself and his creditors, he shall serve a copy of the
bankruptcy application, affidavit and statement of affairs on the nominee supervising the arrangement.
(2) Where the debtor’s bankruptcy application is filed against a firm by some of the partners in the firm, a copy
of the application, affidavit and statement of affairs shall be served on those partners who did not consent to or
participate in the filing of the application.
Hearing of debtor’s bankruptcy application
140. The court shall not hear the debtor’s bankruptcy application unless it is satisfied that the bankruptcy
application, affidavit and statement of affairs have been duly served on the parties referred to in rule 139, and any
of such parties may appear at the hearing and be heard.

- Another example
o 3 partners in a firm… 2 of which agree to file for petition against themselves, but one does not
agree hence, have to serve on the remaining person

CONDITIONS FOR PRESENTATION OF BANKRUPTCY PETITIONS - SECTION 60

Jurisdiction of HC [s60 BA]

Conditions to be satisfied in respect of debtor
60. —(1) No bankruptcy application shall be made to the court under section 57 (1) (a) or 58 (1) (a) against an
individual debtor unless the debtor —
(a) is domiciled in Singapore;
(b) has property in Singapore; or
(c) has, at any time within the period of one year immediately preceding the date of the making of the application
—
(i) been ordinarily resident or has had a place of residence in Singapore; or
(ii) carried on business in Singapore.
(2) No bankruptcy application shall be made to the court under section 57 (1) (b) or 58 (1) (b) against a firm
unless —
(a) at least one of the partners in the firm —
 (i) is domiciled in Singapore;
(ii) has property in Singapore; or
(iii) has, at any time within the period of one year immediately preceding the date of the making of the
application, been ordinarily resident or has had a place of residence in Singapore; or
(b) the firm has, at any time within the period of one year immediately preceding the date of the making of the
application, carried on business in Singapore.
(3) The reference in subsection (1) (c) (ii) to an individual carrying on business in Singapore shall include —
(a) the carrying on of business in Singapore by a firm in which the individual is a partner; and
(b) the carrying on of business in Singapore by an agent or manager for the individual or for such a firm.

Before the HC has jurisdiction to hear and grant bankruptcy petitions, either:
- The debtor is domiciled in Singapore; or
- The debtor has property in Singapore – make sure!!!; or
- The debtor has within one year before the date of presentation of petition,
• been ordinarily resident or has had place of residence in Singapore or
 no definition of “ordinary resident” in the BA, therefore, can go to other Acts (e.g.
Income Tax Act for purposes of whether a foreigner is subjected to Income Tax Act)
• carried on business in Singapore – ie some sort of nexus in this jurisdiction
 this is further elaborated in s60(3)

- where debt occurred outside sg, judgement shld be enforceable in sg

Algemene Bank Nederland v Loo Choon Yow 1989 2 MLJ 258

Facts:
The petitioning creditor had obtained judgment against the judgment debtor but following the latter`s failure to
pay the debt, a bankruptcy notice was served by the petitioning creditor against the judgment debtor. The
bankruptcy petition was then filed. Para 2 of this petition stated that the judgment debtor had for the greater part
of six months preceding the presentation of the petition resided in Singapore, within the jurisdiction of the court.
The bankruptcy notice and petition were both served on the judgment debtor by way of substituted service
through advertisement in the newspapers. LCB, the judgment debtor`s brother, then filed an affidavit in which he
deposed that he had personal knowledge that the judgment debtor was not residing in Singapore since late 1985,
that he had married a Taiwanese lady and since 1985 had been domiciled and residing in Taiwan and did not own
any dwelling house or have a place of business in Singapore. Another person, CCK, an accountant, who said that
he had handled the judgment debtor`s financial affairs since the judgment debtor had left Singapore, also filed an
affidavit confirming the affidavit of LCB.
Holdings:
Held, granting the petition:
(1).The burden was on the petitioning creditor to satisfy the court that the judgment debtor was a debtor for the
purposes of s 3 of the Bankruptcy Act but this burden had been discharged by reference to the judgment debtor`s
passport and to another exhibit (a certificate issued by the Trade Mission of the Republic of China in Singapore)
produced by the judgment debtor which showed that he was born in Singapore and that he was a Singapore
citizen.
(2).The affidavits of the judgment debtor`s witnesses were rejected on the grounds that they were hearsay.
Whether the judgment debtor had changed his domicile was a matter within the personal knowledge of himself,
so the witnesses could not say that they had personal knowledge of this matter.
(3).As regards the statement that the judgment debtor had married a Taiwanese lady, had a son and purchased a
house in Taiwan with the intention of residing there permanently, no documentary evidence was produced to
show any of these facts.
(4).The judgment debtor`s passport showed that he had travelled extensively to many countries from 1985 to
1988. But frequency of travel does not prove a change of domicile nor did the judgment debtor himself so allege.
(5).The judgment debt was not denied, the petitioning creditor had discharged the burden or proving that the
judgment debtor was a debtor at the time the bankruptcy notice was served on him, and judgment debtor had
failed to adduce evidence that he had changed his domicile at the relevant time, a receiving order and an
adjudicating order was therefore made against the judgment debtor.

er brauch (a debtor) 1978 1 AER 1004

Objective 2 – simplify, streamline and update bankruptcy proceedings

a) Single grd of inability to pay replacing archaic concept of bankruptcy act

GROUNDS FOR PETITION - SECTION 61

61. —(1) No bankruptcy application shall be presented to the court in respect of any debt or debts unless at the
time the application is made —
(a) the amount of the debt, or the aggregate amount of the debts, is not less than $10,000;
(b) the debt or each of the debts is for a liquidated sum payable to the applicant creditor immediately;
(c) the debtor is unable to pay the debt or each of the debts; and
(d) where the debt or each of the debts is incurred outside Singapore, such debt is payable by the debtor to the
applicant creditor by virtue of a judgment or award which is enforceable by execution in Singapore.
(2) The Minister may, by order published in the Gazette, amend subsection (1) (a) by substituting a different sum
for the sum for the time being specified therein.

- No bankruptcy petition shall be presented unless at the time the petition is presented

1. The debt is not less than S$10,000 – if less than this don’t bother, wont fulfil the conds for bankrupcy; *Re
JBJ (2000) 3 SLR 207
 there may be situations where there is a joint petition by several creditors… who, but themselves,
don’t make up $10,000
 however, if together they meet the threshold, and the collecting debt is more than $10,000, then
they can present the petition

2. The debt is for a liquidated sum payable immediately to the petitioning creditor – must quantify the sum;

3. The debtor is unable to pay the debt – n6te that in practice, debtor likey to be able to pay up with time;
note circumstances of the case, it depends, (not examinable but in practice a flexible area); and (actual
inability to pay)

4. If the debt is incurred outside Singapore, such debt is payable as a result of judgment or award which is
enforceable by execution in Singapore – make sure that can enforce in sg! Find in civil procedure how to do
so. If cannt execute in sg then difficulty filing for bankruptcy

Re Jeyaretnam Joshua Benjamin [2000] 3 SLR 207

Facts
Two bankruptcy petitions were filed against the debtor in respect of his failure to pay the sums under two
judgment debts. Both petitions were heard together before an assistant registrar. At the first hearing, the court
was informed of an instalment plan which allowed the debtor to discharge his debt by instalments. Under the
plan, it was agreed that the petitions would be filed but the hearings would be adjourned until the debtor’s debts
were fully discharged. In the event of default by the debtor, the petitioners were entitled at their discretion to
terminate the plan and proceed with their respective petitions. Accordingly, the petitions were adjourned from
month to month until at one of the hearings, the petitions were ordered to be withdrawn subject to the petitioners’
right to restore them for hearing in the event of default by the debtor.
The debtor defaulted in one of the instalment payments and consequently, the two petitions were restored for
hearing. At the hearing, the debtor’s solicitor applied for the matters to be stayed on the ground that full payment
of the balance due could be made soon. It was further argued that a stay was justified because under s 61 of the
Bankruptcy Act (Cap 20) (“the Act”), a bankruptcy order could only be made where the amount of the debt was
not less than $10,000 whereas the respective outstanding debts were below that amount. In addition, before
making a bankruptcy order, the court had to be satisfied that the debtor was unable to pay the debts and such was
not shown on the facts. The petitioners objected to the stay and pointed out that the debtor had been late in all
except one of the previous instalments. It was argued that the $10,000 minimum applied only at the time of
presentation of the petitions. The assistant registrar decided to make a bankruptcy order against the debtor in one
of the petitions and granted leave for the other petition to be withdrawn. The debtor appealed against the
bankruptcy order. In the course of the hearing of the appeal, the debtor paid up in full the outstanding balance
due to both petitioners. Thus, both bankruptcy petitions were withdrawn and the bankruptcy order was asked to
be set aside.
Held, setting aside the bankruptcy order:
(1) The petitions, as they appeared on record, showed that there was no dishonesty involved in their
presentation. There was no intention to conceal from the court the fact that the petitioners had allowed the debtor
to pay according to an instalment plan. At each hearing, particularly when the bankruptcy order was made, the
court was properly informed of the situation. The petitioners had complied with all the formal requirements of
the Bankruptcy Act and the Bankruptcy Rules while the debtor had not rebutted the presumption that he was
unable to pay his debt.
(2) The debtor’s ability to pay must be assessed in relation to the time the petition was presented. Willingness
and ability to pay progressively in the future did not equate with ability to pay a debt forthwith. The petitions
here were, both in form and in substance, in compliance with s 61 of the Act and had properly invoked the
presumption in s 62.
(3) The statutory minimum debt of $10,000 specified in s 61(1)(a) of the Act applied only at the time of
presentation of a petition. The fact that the debt had since fallen below the statutory minimum did not constitute
a ground on which the court might dismiss a petition.

PRESUMPTIONS OF INABILITY TO PAY DEBTS - SECTION 62 (3 conditions)

- 1. Failure to comply with statutory demand or did not apply to Court to set aside statutory demand within
21 days of service (most common type of presumption for inability of payment of debt);
• very precise – stat dd in prescribed form
• must satisfy within 21 days
• after which bankruptcy petition
Illustration
(A) the petitioning creditor to whom the debt is owed has served the Statutory Demand on the debtor in the
prescribed manner.
(B) 21 days have elapsed since the service of the statutory demand
(C) the debtor has neither complied with it nor applied to the court to set aside the statutory demand.

- 2. or Execution issued against debtor in respect of Judgment debt remains unsatisfied in whole or in part –
not so common a method but still used; or

- 3. Debtor has left Singapore with the intention to defeat or delay or obstruct creditor’s recovery of debt –
difficult to prove. Must prove tt he left juris – evid to be adduced; packing up assets and trying to abscond;
ensure tt he doenst intend to come back. Difficult to prove. Unless no other choice try not to take this
route.

Presumption of inability to pay debts

62. For the purposes of a creditor’s bankruptcy application, a debtor shall, until he proves to the contrary, be
presumed to be unable to pay any debt within the meaning of section 61 (1) (c) if the debt is immediately payable
and —
(a)
(i) the applicant creditor to whom the debt is owed has served on him in the prescribed manner, a statutory
demand;
(ii) at least 21 days have elapsed since the statutory demand was served; and
(iii) the debtor has neither complied with it nor applied to the court to set it aside;
(b) execution issued against him in respect of a judgment debt owed to the applicant creditor has been returned
unsatisfied in whole or in part; or
(c) he has departed from or remained outside Singapore with the intention of defeating, delaying or obstructing a
creditor in the recovery of the debt.

PROCEDURES IN BANKRUPTCY PROCEEDINGS

b)(contd fr above) creditors can present bankruptcy application against debtors without obt judgment against
them first
- but creditors not to abuse this by issing stat dds for debts involv bona fide disputes
- re a debtor no 32 of 1991 (no 2) 1994 BCC 524 – court must always be qlsert ot danger tt stat dd may be
used to put pressure on debtor to pay debt, liab for which not estd by udgmenet and disputed
- Philex v Golban 1993 – petitions founded on debts invol bona fide disputes may be categorized as abuse of
process and dismissed with costs on indemnity basis
- re a company 1992 1 WLR 351 – recourse to bankruptcy courts not a substi to O14 procedure

c) defects in stat demand

- mere technicalities x defeat proceedings – court will consider all circumstance and set aside stat dd only
whre substantive injustice caused to debtor

Wong Kwei Cheong v ABN-AMRO Bank NV [2002] 3 SLR 594

- Facts
- The appellants (‘the bank’) issued a statutory demand (the ‘SD’) under s 62 of the Bankruptcy Act (Cap 20,
2000 Ed) (the ‘Act’) against the respondent (‘Wong’) for moneys allegedly due under a personal guarantee
in respect of banking facilities extended by the bank.
- The bank made six failed attempts to serve the SD personally on Wong either at his last known residence, or
at other possible addresses of his. It then advertised a notice of the SD in the newspapers.
- Wong then successfully applied under r 97(1) and 97(3) of the Bankruptcy Rules (Cap 20, R 1, 1996 Ed)
(the ‘Rules’) to have the SD set aside. On the bank’s appeal, the issue was whether the advertisement was
good service of the SD and, if not, whether it ought to be set aside on this ground.

- Held, setting aside the SD and dismissing the appeal:

- The SD was not served on Wong in accordance with r 96. First, the bank could advertise the SD under
r 96(4)(c) only if it was unable to effect substituted service in accordance with rr 96(4)(a) and 96(4)(b)
because it did not know Wong’s last place of residence, business or employment. This was not so in the
present case as the bank knew Wong’s last known residence and should have effected substituted service
under rr 96(4)(a) or (b), or both. Second, the bank was obliged under r 96(1) to take reasonable steps to
bring the SD to Wong’s attention. As the bank knew who Wong’s solicitors were, it should have brought the
SD to his attention through them. Third, even if the bank was justified in effecting substituted service by
advertisement under r 96(4)(c), it failed to comply with that rule as it had advertised a notice of the SD
instead of the SD itself.
- The court was obliged to set aside an SD under r 98(2)(b) if the debtor disputed the claim in the SD and the
dispute appeared to be substantial. Further, it was not the bankruptcy court’s function, at the hearing of an
application to set aside an SD, to conduct a full hearing of the dispute and adjudicate on the merits of the
creditor’s claim.
- The SD was set aside. First, the disputes raised by Wong appeared to be substantial. Second, given that the
court was bound, under rr 108(6) and 127(c), to dismiss a petition for bankruptcy founded on an SD if the
SD was not served in compliance with r 96, it ought to grant an application to set aside such an SD under
r 98(2)(e). Further, the intention behind the Rules was to ensure mandatory compliance of the rules relating
to service. Hence, non-compliance with r 96 could not be treated as an irregularity or a formal defect which
could be cured under s 158(1) of the Act, as that would negate the peremptory nature of rr 108(6) and
127(c).
- There was no statutory presumption, under s 62 of the Act, that Wong was unable to pay the debt. This was
because the SD was not served on him in accordance with r 96, which was the ‘prescribed manner’ required
in s 62(a)(i).

The Straits Times Press (1975) Limited v Wong Chee Kok [1998] SGHC 77
- The judgment debtor appealed against the decision of the learned Deputy Registrar dismissing his
application to set aside the statutory demand dated 31 October 1997. The Deputy Registrar also gave liberty
to the judgment creditors to present their bankruptcy petition forthwith.
- 2. At the appeal before me, counsel for the judgment debtor relied on the sole ground that the statutory
demand cannot be based on more than one debt. It was not disputed that the statutory demand made under s
62 of the Bankruptcy Act (Cap 20, 1996 Ed.) was based on two judgment debts of principal amounts
$31,836.29 and $4,811.00. After adding the interest accrued on these two debts and after allowing for (a)
receipts from several garnishee proceedings taken out by the judgment creditors and (b) a set-off of $5,000
from an award made in favour of the judgment debtor, the balance sum owing as at 31 October 1997 was
$28,154.12. The statutory demand was based on this balance sum.
- 3. The appellant’s counsel argued that demands for individual debts have to be in separate statutory demands
because the debtor must be given a fair opportunity to answer to each of the debts. It would be difficult and
confusing for the debtor should he decide to challenge one debt and not challenge the others, since he would
not know exactly how much he would have to pay to satisfy the statutory demand in respect of those debts
which he is not disputing.
- I do not think that the consolidation of several debts into one statutory demand presents much of a problem
for a debtor who wishes to dispute part of the consolidated debt but pay up on the undisputed remainder.
- As can be seen in Rule 94 of the Bankruptcy Rules S269/95, full particulars of each debt together with the
accrued interest, penalties and charges, including the source or basis of each debt to enable the debtor to
identify the debt, must be provided in the statutory demand. When such details are provided, there should be
little difficulty in determining from the statutory demand what the actual amount due for each debt is.
- In the event of any difficulty, the debtor can easily approach the person named in the statutory demand for
the purpose of securing or compounding the debt. I cannot imagine that the contact person will be reluctant
to assist a debtor who is going to pay up.
- Provision of such information concerning a contact person is obviously to help the debtor and I do not think
the problem raised by counsel should be a sufficient basis for rendering a statutory demand invalid merely
because a consolidation of debts into one statutory demand can be confusing to a debtor who wishes to pay
up on a part of the debt which he does not dispute.
- On the facts of this case, the debtor was not disputing both judgment debts nor the correctness of the
calculations in the statutory demand. There was also no evidence that he tried to make payment to settle any
part of the debts. The potential difficulty posed by counsel did not arise at all. Hence, the debtor suffered no
prejudice whatsoever and counsel rightly did not invite the court to exercise its discretion under Rule
98(2)(e) to set aside the statutory demand on the ground of prejudice.
- 14. I do not think that the principles stated by these two old English cases are applicable any longer since
our new Bankruptcy Act is modeled somewhat on the English Insolvency Act and likewise, a creditor’s
petition is no longer based on an act of bankruptcy (as was previously the case) but on a debtor’s inability to
pay a debt or an aggregate debt of not less than $2000 to that creditor. Under s 62 of the new Act, a debtor
shall be presumed to be unable to pay a debt if he fails to comply with or apply to set aside a statutory
demand within 21 days of being served that demand.
- 15. Clearly, the new Bankruptcy Act (Cap 20, 1996 Ed) is a major reform to our bankruptcy laws that had
existed previously for many years. Therefore, resort to local cases prior to the new Bankruptcy Act, which
decided along the same lines as the older English cases, may not be of much help either.
- 23. I would like to quote what the Minister for Law Professor S Jayakumar had said in Parliament during the
Second Reading of the Bankruptcy Bill:
- ..there is a problem of present procedures being very cumbersome and complex. The present procedures are
outdated and also too technical. They contribute to substantial delay in the administration of estates. ….
- ….the Bill streamlines and updates cumbersome, complex and archaic bankruptcy procedures. Sir,
bankruptcy proceedings, bankruptcy administration and discharge from bankruptcy will be streamlined and
simplified. This will result in greater efficiency and lower costs. For example, the single ground of inability
to pay will replace the outmoded concept of acts of bankruptcy on which proceedings are based.
Furthermore, a new 2-tier court process consisting of bankruptcy petition and bankruptcy order will replace
the present 4 tier process of notice, petition and two court orders. These innovations have also been adopted
by the United Kingdom.
- 24. Therefore, mere technicalities which existed previously for setting aside a bankruptcy notice
should not simply be imported into the new bankruptcy regime for setting aside a statutory demand.
Due regard must be paid to the objects of the new Bankruptcy Act and whether there is evidence
showing that the debtor had in fact suffered substantial prejudice or injustice by reason of those
technical defects or irregularities. In this case, the judgment debtor had not suffered any prejudice or
injustice.
- 25. For the reasons given, I dismissed his appeal with costs.

- Debt at $10,000* or more

- Statutory Demand

Rules 94-98, 108

Form and contents of statutory demand
94. —(1) A statutory demand shall be in Form 1 and shall be dated and signed by the creditor himself or by a
person authorised to make the demand on the creditor’s behalf.
(2) The statutory demand shall state the actual amount of the debt that has accrued as of the date of the demand.
(3) If the amount claimed in the statutory demand includes interest, penalties, charges or any pecuniary
consideration in lieu of interest, it shall separately identify the actual amount that has accrued as at the date of the
demand and the rate at which and the period for which it was calculated.
(4) The statutory demand shall state the consideration for the debt or, if there is no consideration, the way in
which the debt arises and —
(a) if the debt is founded on a judgment or an order of a court, it must give details of the judgment or order,
including the action under which the judgment or order was obtained and the date of the judgment or order; and
(b) if the debt is founded on grounds other than a judgment or an order of a court, it must give such details as
would enable the debtor to identify the debt.
(5) If the creditor holds any property of the debtor or any security for the debt, there shall be specified in the
demand —
(a) the full amount of the debt; and
(b) the nature and value of the security or the assets.
(6) The debt of which payment is claimed shall be the full amount of the debt less the amount specified as the
value of the security or assets.

Information to be given in statutory demand

95. —(1) The statutory demand must include an explanation to the debtor of the following matters:
(a) the purpose of the demand, and the fact that if the debtor does not comply with the demand, bankruptcy
proceedings may be commenced against him;
(b) the time within which the demand must be complied with if that consequence is to be avoided;
(c) the methods of compliance available to the debtor; and
(d) the debtor's right to apply to the court to set aside the statutory demand.
(2) The statutory demand shall specify one or more named individuals with whom the debtor may, if he wishes,
enter into communication for purposes of securing or compounding for the debt to the satisfaction of the creditor,
and the address and telephone number (if any) of any individual so named in the demand must be given.
(3) The debtor shall not be under any obligation to make inquiries in respect of the statutory demand except for
the purposes given in paragraph (2).
Requirements as to service
96. —(1) The creditor shall take all reasonable steps to bring the statutory demand to the debtor’s attention.
(2) The creditor shall make reasonable attempts to effect personal service of the statutory demand.
(3) Where the creditor is not able to effect personal service, the demand may be served by such other means as
would be most effective in bringing the demand to the notice of the debtor.
(4) Substituted service under paragraph (3) may be effected in the following manner:
(a) by posting the statutory demand at the door or some other conspicuous part of the last known place of
residence or business of the debtor or both;
(b) by forwarding the statutory demand to the debtor by prepaid registered post to the last known place of
residence, business or employment of the debtor;
(c) where the creditor is unable to effect substituted service in accordance with sub-paragraph (a) or (b) by
reason that he has no knowledge of the last known place of residence, business or employment of the debtor, by
advertisement of the statutory demand in one or more local newspapers, in which case the time limited for
compliance with the demand shall run from the date of the publication of the advertisement; or
(d) such other mode which the court would have ordered in an application for substituted service of an
originating summons in the circumstances.
(5) Where a statutory demand is to be served out of jurisdiction, the period to be stipulated in the statutory
demand for compliance and setting aside of the demand shall not be less than 21 days from the date on which the
demand is served or deemed in accordance with these Rules to be served on the debtor.
(6) A creditor shall not resort to substituted service of a statutory demand on a debtor unless —
(a) the creditor has taken all such steps which would suffice to justify the court making an order for substituted
service of a bankruptcy application; and
(b) the mode of substituted service would have been such that the court would have ordered in the circumstances.
(7) Where the statutory demand is made against a firm, personal service of the statutory demand shall be deemed
to have been effected on all the partners in the firm if it is served at the principal place of business of the firm in
Singapore on any one of the partners, or on any person having at the time of service control or management of
the business of the firm thereat.
(8) If the creditor is unable to serve the statutory demand on the firm as required under paragraph (7), he may
resort to substituted service in accordance with paragraphs (3) to (6) as if the statutory demand is against each of
the partners in the firm.

Application to set aside statutory demand

97. —(1) Subject to paragraph (2), the debtor who has been served with a statutory demand may —
(a) within 14 days; or
(b) where the demand was served outside jurisdiction, within 21 days,
from the date on which the demand is served or deemed in accordance with these Rules to be served on him,
apply to court by way of originating summons for an order setting aside the statutory demand.
(2) No appearance need be entered to an originating summons under this rule.
(3) The court may, upon the application of the debtor, allow the debtor an extension of time to make his
application to set aside the statutory demand.
(4) Unless the court otherwise orders, the time limited for the debtor to comply with the statutory demand shall
cease to run as from the date on which the application is filed in court.
(5) The application shall be supported by an affidavit —
(a) specifying the date on which the statutory demand came into the debtor’s hands;
(b) stating the grounds on which the statutory demand should be set aside; and
(c) exhibiting a copy of the statutory demand.
(6) The application and the affidavit in support shall be filed at the same time and shall be served on the creditor
within 3 days from the date of filing.

Hearing of application to set aside statutory demand

98. —(1) On the hearing of the application, the court may either summarily determine the application or adjourn
it, giving such directions as it thinks appropriate.
(2) The court shall set aside the statutory demand if —
(a) the debtor appears to have a valid counterclaim, set-off or cross demand which is equivalent to or exceeds the
amount of the debt or debts specified in the statutory demand;
(b) the debt is disputed on grounds which appear to the court to be substantial;
(c) it appears that the creditor holds assets of the debtor or security in respect of the debt claimed by the demand,
and either rule 94 (5) has not been complied with, or the court is satisfied that the value of the assets or security
is equivalent to or exceeds the full amount of the debt;
(d) rule 94 has not been complied with; or
(e) the court is satisfied, on other grounds, that the demand ought to be set aside.
(3) If the court dismisses the application, it shall make an order authorising the creditor to file a bankruptcy
application either on or after the date specified in the order.

Proof of service of statutory demand

108. —(1) Where a creditor’s bankruptcy application is based on non-compliance with a statutory demand, an
affidavit proving service of the statutory demand shall be filed in support of the application.
(2) The affidavit shall state the mode, date and time of the service and shall exhibit a copy of the statutory
demand and any acknowledgment of service.
(3) Where the statutory demand has been served other than by personal service, the affidavit shall —
(a) give particulars of the steps taken to effect personal service and the reasons for which they have been
ineffective;
(b) state the means whereby (attempts at personal service having been unsuccessful) it was sought to bring the
demand to the debtor’s attention and explain why such means would have best ensured that the demand would be
brought to the debtor’s attention;
(c) exhibit evidence of such alternative mode or modes of service; and
(d) specify a date by which to the best of the knowledge, information and belief of the person making the
affidavit, the demand would have come to the debtor’s attention.
(4) The steps of which particulars are given for the purposes of paragraph (3) (a) must be such as would have
sufficed to justify an order for substituted service of a bankruptcy application being made by the court.
(5) If the affidavit specifies a date for the purposes of compliance with paragraph (3) (d), then unless the court
otherwise orders, that date shall be deemed for the purposes of these Rules to have been the date on which the
statutory demand was served on the debtor.
(6) The court shall dismiss the creditor’s bankruptcy application if it is not satisfied that the creditor has
discharged the obligations imposed on him by rule 96.
Form 1 –
- State partrs of debt
o Amt of debt due as date of dd
o Principal sumn owed
o Interest due incl how cacl
o Consideration for debt and details of judgement
o Partrs of any security
o Partrs of assignment of debt
- Service of stat dd
o Personal service – reasonable attemots
o Subst service
 Posting
 Prepaid registere post
 Advert
 Others
- Effect
o Compliance whtin 21 days
o ( failure to comply/set aside within 21 days after service leads to..) presumption of inability to pay
debts
• Presentation of Petition
 (All dispositions of property rendered void from this point)
 but in practice, takes long time and quite difficult; troublesome if to have it this way
• Service
• Hearing
• Bankruptcy Order against individual or firm (Bankruptcy commences from date of order)
- Application to set aside
o File within 14 days of stat dd service
o OS
o Grds for setting aside

Mode of Service of Stat Demand and Bankruptcy Petition – when service is valid under bankruptcy rules

Re Ramaschayana Sulistyo [2005] 1 SLR 483

- Issue: The debtors had been parties to a Guarantee which provided for service of process to be made to
their nominated forwarding agent. Service of the stat demands and petitions were effected as such. Was
this in contravention of Rules 96 and 109 Bankruptcy Rules?
- Arrangement to serve papers on each other
- Not served in usual manner therefore
- So whether service valid
- Impt – if not, then appiction for banktrupcy x go through
- Held: Service was valid. Nothing in the Bankruptcy Act or Rules precluded against consensual
arrangements for the service of process.

Appeal against making of Bankruptcy Order

Re Jeyaretnam Joshua Benjamin [2000] 3 SLR 207 Bankruptcy No. 3130 of 1999
- Facts:
- Petitions were filed against the debtor. An installment plan was agreed upon and the
petitions were adjourned. The debtor subsequently defaulted after some payments were
made.
- Creditor started petition
- The petitions were heard and a Bankruptcy Order was made. The debtor argued that the
installment payments had brought his debt level below the $10,000 minimum.
 - Recall under s61, it is stated that no petition to be presented unless the debt was more than
$10,000 at the time of petition
- Held
- On the facts of the case, the bankruptcy petition was not defective
- A Bankruptcy Order can be made even though the Judgment debtor has, subsequent
to the presentation of the bankruptcy petition, made payment to bring the debt owed to
below the statutory limit of $10,000.00
- The statutory minimum debt of $10,000 specified in s 61(1)(a) of the Act applied only at
the time of presentation of a petition
- So even if after presentation presented, even if falls below 10,000, order of bankruptcy can
still be made
- Lecturer: Hence, it is very clear that the pertinent point is the presentation of the petition, not the time of
hearing

Personal Comments
- However, it is arguable whether JBJ case is really as strong an authority for the proposition above
- This is because on the facts of the case, the amount of debt was clearly above $10,000 and there was really
no need for the learned Judicial Commissioner to got into those facts
- Hence, the proposition that the debt need not be above the statutorily mandated amount at the time of
hearing of the bankruptcy order was only obiter, and according to Cross & Harris, on Stare Decisis, a
subsequent court is not obliged to follow this principle
- In fact, in the UK case of Re Patel, a debtor [1986] 1 WLR 221, it was held that there was a need to satisfy
the requirements both at time of presentation of petition and at the time of hearing
- Although this case was decided before the Singapore Bankruptcy Act was enacted, the English Court was
construing a very similar provision to our present section 62 BA ==> although this case has not been relied
upon in our local courts, it is persuasive authority
- Difficulty with relying on this case:
o Because of the need for all requirements to be present at the time of the bankruptcy order hearing,
the creditor who intends to present a bankruptcy petition has to be careful when accepting tender/
part-tender of re-payment
o It was held in Re Patel at page 224, paragraph (e) – (f) that the creditor must be careful to accept
tender or part tender; in fact, he is not obliged to do so and hence, should avoid doing so

Recent CA case of Medical Equipment Pte Ltd v Alice Sim Kiok Lan [1999] 1 SLR 70 (IMPT!!)
- Petitioning creditor (PC) did not get order… and the PC appealed to have bankruptcy order made against the
debtor
- Involved 2 debtors under voluntary arrangements.
- CA held
(1) Both sections s60, 61, 65 are applicable to petitions presented to Section 57(1)(a)(ii) [voluntary
arrangements]
(2) Failure to comply with Section 61 is not a mere formal defect or irregularity that did not cause substantial
injustice. S158 could not be invoked.
==> appeal dismissed

- Note: Section 158 BA provides that no proceedings in bankruptcy shall be invalidated by any formal defect
or by any irregularity, unless the court is of the opinion that substantial injustice has been caused by the
defect or irregularity and that the injustice cannot be remedied by any order of the court.

Formal defect not to invalidate proceedings or acts

158. —(1) No proceedings in bankruptcy shall be invalidated by any formal defect or by any irregularity, unless
the court before which an objection is made to the proceedings is of the opinion that substantial injustice has
been caused by the defect or irregularity and that the injustice cannot be remedied by any order of that court.
(2) The acts of a person as the trustee of a bankrupt’s estate or as a special manager, and the acts of the creditors’
committee appointed for any bankruptcy, shall be valid notwithstanding any defect in the appointment, election
or qualifications of the trustee or manager or, as the case may be, of any member of the committee.
EFFECT OF BANKRUPTCY ON CREDITORS

Legal moratorium
- No further proceedings may be taken by creditors for debts incurred before bankruptcy except with
leave of court - Section 76 (1)(c)
• creditor has to stop all action and proceedings x go further
• some cases where lawyers ask for permission and assume tt letter is enough
• not enough!! – must get court order!!! If not, and creditor proceed, may nt recover anything
and may not even recover costs
• this is because all creditors should have to share pari passu with the general pool of creditors

Effect on secured creditors

- All secured creditors cannot claim further interest if they do not realise security within six months from
the date of the bankruptcy order or such further period as the Official Assignee may determine - Section
76(4)

• in many cases where bankrupt bankrupt because in default of mortgage, bank x sell it off,
delay in realising security within 6 mths, then wont be able to recover further interest no
matter how much may have been incurred.
• Must realize within 6 mths or write in to OA before 6 mths up
• When writing, state clearly why they have not sold property or realized the security

- bankruptcy does not affect the secured creditor’s right to deal with the property, as though the debtor has not
been made a bankrupt
o there is no duty under Land Law for the sale of the security upon default, only duty is to get the
best reasonable price when realising the security
o hence, there were cases where secured creditors hung onto the property and to charge contractual
interests into the security
o hence, with the provision, they cannot charge interest if they want to dispose the property beyond 6
months
o however, there is an informal application that can be made to the OA [no procedure provided for
by the rules] to state why they cannot discharge the property within the 6 months

Effect of bankruptcy order

76. —(1) On the making of a bankruptcy order —
(a) the property of the bankrupt shall —
(i) vest in the Official Assignee without any further conveyance, assignment or transfer; and
(ii) become divisible among his creditors;
(b) the Official Assignee shall be constituted receiver of the bankrupt’s property; and
(c) unless otherwise provided by this Act —
(i) no creditor to whom the bankrupt is indebted in respect of any debt provable in bankruptcy shall have
any remedy against the person or property of the bankrupt in respect of that debt; and
(ii) no action or proceedings shall be proceeded with or commenced against the bankrupt,
except by leave of the court and in accordance with such terms as the court may impose.
(2) Where a bankruptcy order is made against a firm, the order shall operate as if it were a bankruptcy order
made against each of the persons who, at the time of the order, is a partner in the firm.
(3) This section shall not affect the right of any secured creditor to realise or otherwise deal with his security in
the same manner as he would have been entitled to realise or deal with it if this section had not been enacted.
(4) Notwithstanding subsection (3) and section 94, no secured creditor shall be entitled to any interest in
respect of his debt after the making of a bankruptcy order if he does not realise his security within 6
months from the date of the bankruptcy order or such further period as the Official Assignee may
determine.

Effect on ordinary creditors

- Ordinary creditors will rank behind preferential creditors - Section 90
 • in fact, if not enough money to pay all creditors in full which is isu the case, then if rank eq,
will be paid proportionately but some creditors ‘more eq than others’ eg CPF board; income
and property tax
• Preferential creditors include Income Tax, GST, etc.

Priority of debts
90. —(1) Subject to this Act, in the distribution of the property of a bankrupt, there shall be paid in priority to all
other debts —
(a) firstly, the costs and expenses of administration or otherwise incurred by the Official Assignee and the
costs of the applicant for the bankruptcy order (whether taxed or agreed) and the costs and expenses properly
incurred by a nominee in respect of the administration of any voluntary arrangement under Part V;
(b) secondly, subject to subsection (2), all wages or salary (whether or not earned wholly or in part by way of
commission) including any amount payable by way of allowance or reimbursement under any contract of
employment or award or agreement regulating the conditions of employment of any employee;
(c) thirdly, subject to subsection (2), the amount due to an employee as a retrenchment benefit or an ex
gratia payment under any contract of employment or award or agreement that regulates the conditions of
employment, whether such amount becomes payable before, on or after the date of the bankruptcy order;
(d) fourthly, all amounts due in respect of any workmen’s compensation under the Workmen’s Compensation
Act (Cap. 354) accrued before, on or after the date of the bankruptcy order;
(e) fifthly, all amounts due in respect of contributions payable during the 12 months immediately before, on
or after the date of the bankruptcy order by the bankrupt as the employer of any person under any written law
relating to employees’ superannuation or provident funds or under any scheme of superannuation which is an
approved scheme under the Income Tax Act (Cap. 134);
(f) sixthly, all remuneration payable to any employee in respect of vacation leave, or in the case of his death,
to any other person in his right, accrued in respect of any period before, on or after the date of the bankruptcy
order; and
(g) seventhly, the amount of all taxes assessed and any goods and services tax due under any written law
before the date of the bankruptcy order or assessed at any time before the time fixed for the proving of debts has
expired.
(2) The amount payable under subsection (1) (b) and (c) shall not exceed an amount that is equivalent to 5
months’ salary whether for time or piecework in respect of services rendered by any employee to the bankrupt or
$7,500, whichever is the less.
(3) The Minister may, by order published in the Gazette, amend subsection (2) by varying the amount specified
in that subsection as the maximum amount payable under subsection (1) (b) and (c).
(4) For the purposes of subsection (1) (b) and (c) —
"employee" means a person who has entered into or works under a contract of service with the bankrupt and
includes a subcontractor of labour;
"wages or salary" includes —
(a) all arrears of money due to a subcontractor of labour;
(b) any amount payable to an employee on account of wages or salary during a period of notice of termination of
employment or in lieu of notice of such termination, as the case may be, whether such amount becomes payable
before, on or after the date of the bankruptcy order; and
(c) any amount payable to an employee, on termination of his employment, as a gratuity under any contract of
employment, or under any award or agreement that regulates the conditions of his employment, whether such
amount becomes payable before, on or after the date of the bankruptcy order.
(5) For the purposes of subsection (1) (c) —
"ex gratia payment" means the amount payable to an employee on the bankruptcy of his employer or on the
termination of his service by his employer on the ground of redundancy or by reason of any re-organisation of
the employer, profession, business, trade or work, and “the amount payable to an employee” for these purposes
means the amount stipulated in any contract of employment, award or agreement, as the case may be;
"retrenchment benefit" means the amount payable to an employee on the bankruptcy of his employer, on the
termination of his service by his employer on the ground of redundancy or by reason of any re-organisation of
the employer, profession, business, trade or work, and “the amount payable to an employee” for these purposes
means the amount stipulated in any contract of employment, award or agreement, as the case may be, or if no
amount is stipulated therein, such amount as is stipulated by the Commissioner for Labour.
(6) The debts in each class specified in subsection (1) shall rank in the order therein specified but debts of the
same class shall rank equally between themselves, and shall be paid in full, unless the property of the bankrupt is
insufficient to meet them, in which case they shall abate in equal proportions between themselves.
(7) Where any payment has been made to any employee of the bankrupt on account of wages, salary or vacation
leave out of money advanced by a person for that purpose, the person by whom the money was advanced shall,
in a bankruptcy, have a right of priority in respect of the money so advanced and paid, up to the amount by which
the sum in respect of which the employee would have been entitled to priority in the bankruptcy has been
diminished by reason of the payment, and shall have the same right of priority in respect of that amount as the
employee would have had if the payment had not been made.
(8) Where any creditor has given any indemnity or made any payment of moneys by virtue of which any asset of
the bankrupt has been recovered, protected or preserved, the court may make such order as it thinks just with
respect to the distribution of such asset with a view to giving that creditor an advantage over other creditors in
consideration of the risks run by him in so doing.
(9) Where an interim receiver has been appointed under section 73 before the making of the bankruptcy order,
the date of the appointment shall, for the purposes of this section, be deemed to be the date of the bankruptcy
order.

==> Only when all these statutorily prioritized creditors have been paid in full that the general creditors come in.

Objective 3 – increase official assignee’s powers

CONSEQUENCES OF BANKRUPTCY ON BANKRUPT

- The bankrupt’s properties are vested in the Official Assignee and become divisible among his creditors -
Sections 76 (1) & 78
• cannot deal with his property if vest in OA – even if in his/creditor’s/friend’s possession
• eg car parked with friend; friend cannot take car still belongs to OA for administration

Effect of bankruptcy order

76. —(1) On the making of a bankruptcy order —
(a) the property of the bankrupt shall —
(i) vest in the Official Assignee without any further conveyance, assignment or transfer; and
(ii) become divisible among his creditors;
(b) the Official Assignee shall be constituted receiver of the bankrupt’s property; and
(c) unless otherwise provided by this Act —
(i) no creditor to whom the bankrupt is indebted in respect of any debt provable in bankruptcy shall have any
remedy against the person or property of the bankrupt in respect of that debt; and
(ii) no action or proceedings shall be proceeded with or commenced against the bankrupt,
except by leave of the court and in accordance with such terms as the court may impose.
(2) Where a bankruptcy order is made against a firm, the order shall operate as if it were a bankruptcy order
made against each of the persons who, at the time of the order, is a partner in the firm.
(3) This section shall not affect the right of any secured creditor to realise or otherwise deal with his security in
the same manner as he would have been entitled to realise or deal with it if this section had not been enacted.
(4) Notwithstanding subsection (3) and section 94, no secured creditor shall be entitled to any interest in respect
of his debt after the making of a bankruptcy order if he does not realise his security within 6 months from the
date of the bankruptcy order or such further period as the Official Assignee may determine.

Description of bankrupt’s property divisible amongst creditors

78. —(1) The property of the bankrupt divisible among his creditors (referred to in this Act as the bankrupt’s
estate) shall comprise —
(a) all such property as belongs to or is vested in the bankrupt at the commencement of his bankruptcy or is
acquired by or devolves on him before his discharge; and
(b) the capacity to exercise and to take proceedings for exercising all such powers in or over or in respect of
property as might have been exercised by the bankrupt for his own benefit at the commencement of his
bankruptcy or before his discharge.
(2) Subsection (1) shall not apply to —
(a) property held by the bankrupt on trust for any other person;
(b) the tools, if any, of his trade;
(c) such clothing, bedding, furniture, household equipment and provisions as are necessary for satisfying the
basic domestic needs of the bankrupt and his family; and
(d) property of the bankrupt which is excluded under any other written law.
- The bankrupt is required to file a Statement of Affairs (SA) disclosing his assets and liabilities - Section
81
• very impt – declaration stating his assets and liab
• if advising someone to be made bankrupt, must advise tt SA to be field and to be truthful. X
be misleading!
• If misleading, may be taken as attempt to mislead as to assets – an offence
• Can also ask for copy of SA if representing creditors

Bankrupt’s statement of affairs

81. —(1) Where a bankruptcy order has been made against an individual otherwise than on a debtor’s bankruptcy
application, the bankrupt shall submit a statement of his affairs to the Official Assignee within 21 days from the
date of the bankruptcy order.
(2) Where a bankruptcy order has been made against a firm —
(a) on a creditor’s bankruptcy application, the bankrupts, being the partners in the firm at the time of the order,
shall submit a joint statement of their partnership affairs, and each partner in the firm shall submit a statement of
his separate affairs; or
(b) on a debtor’s bankruptcy application, every person who at the time of the order is a partner in the firm but
who did not join in the application shall submit a statement of his separate affairs,
to the Official Assignee within 21 days from the date of the bankruptcy order.
(3) The statement of affairs referred to in subsection (2) shall contain —
(a) such particulars of the bankrupt’s assets, creditors, debts and other liabilities as may be prescribed;
(b) in the case of a firm, such particulars of the firm’s assets, creditors, debts and other liabilities as may be
prescribed; and
(c) such other information as may be prescribed.
(4) The Official Assignee may, if he thinks fit —
(a) release the bankrupt from his duty under subsection (1) or (2), as the case may be; or
(b) extend the period specified in subsection (1) or (2).
(5) Where the Official Assignee has refused to exercise a power conferred by this section, the court, if it thinks
fit, may exercise it.
(6) A bankrupt who —
(a) without reasonable excuse, fails to comply with the obligation imposed by this section;
(b) without reasonable excuse, submits a statement of affairs which does not comply with the prescribed
requirements;
(c) submits a statement of affairs which is false, and which he either knows or believes to be false or does not
believe to be true; or
(d) submits a statement which is misleading in any material particular or contains any material omission,
shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $10,000 or to imprisonment
for a term not exceeding 2 years or to both and, in the case of a continuing offence, to a further fine not
exceeding $200 for every day during which the offence continues after conviction.
(7) Any person stating himself, in writing, to be a creditor of the bankrupt may personally or by agent inspect the
statement of affairs filed by the bankrupt under this section at all reasonable times and upon payment of the
prescribed fee take any copy thereof or extract therefrom.
(8) Any person untruthfully stating himself to be a creditor under subsection (7) shall be guilty of an offence and
shall be liable on conviction to a fine not exceeding $2,000 or to imprisonment for a term not exceeding 6
months or to both.

- The bankrupt cannot leave the country without permission from the Official Assignee - Section 131
(1)(b)
• to prevent him fr absconding
• diff in practice – quite a few pple may need to do so for employment
• write to OA and make application and ask for permission
• if advising the bankrupt, ask him to make applic beforehand, not 48 hrs before the due to
leave and expect clearance to be given!

- It is an offence under s131(1)(b) if he leaves the jurisdiction without the leave of the OA. For every
infringement, a summons can be taken against the bankrupt. Penalty – up to 1 month imprisonment.
Disabilities of bankrupt
131. —(1) Where a bankrupt has not obtained his discharge —
(a) he shall be incompetent to maintain any action, other than an action for damages in respect of an injury to his
person, without the previous sanction of the Official Assignee; and
(b) he shall not leave, remain or reside outside Singapore without the previous permission of the Official
Assignee.
(2) A bankrupt who fails to comply with this section shall be guilty of an offence and shall be liable on
conviction to a fine not exceeding $10,000 or to imprisonment for a term not exceeding 2 years or to both.

- The bankrupt cannot bring an action without obtaining permission from the Official Assignee except for
action for damages in respect of injury to his person - Section 131 (1)(a)
• need to pay security for costs of expected action
• but if bankrupt has had industrial action for eg, and wants to sue, can just go ahead and show
tt is suing because of injury

- The bankrupt cannot incur credit exceeding $500 without disclosing his bankruptcy - Section 141(1) (a)
• – note: does not cover guarantor-ship, although bankrupts are advised not to be guarantors.
• See below for provision

Obtaining credit; engaging in business

141. —(1) A bankrupt shall be guilty of an offence if, being an undischarged bankrupt —
(a) either alone or jointly with any other person, he obtains credit to the extent of $500 or more from any person
without informing that person that he is an undischarged bankrupt; or
(b) he engages in any trade or business under a name other than that under which he was adjudicated bankrupt
without disclosing to all persons with whom he enters into any business transaction the name under which he was
adjudicated bankrupt.
(2) In this section, any reference to a bankrupt obtaining credit shall be read as including any case in which —
(a) goods are bailed to him under a hire-purchase agreement; and
(b) he is paid in advance (whether in money or otherwise) for the supply of goods or services.

- The bankrupt cannot be a director of a company or play a direct or indirect part in the management of
the company or business, unless he has obtained the Official Assignee’s permission or leave of court -
Section 22 of Business Registration Act & Section 148 of Companies Act
• varies fr case to case
• usu those who make applics are those who are trading in business and need to do work
themselves so need to apply for permission
• – Note: permission from the OA is a much cheaper alternative.

- The bankrupt cannot be a trustee or a personal representative unless permission is obtained from the
Court - Section 130
• may be made personal rep due to someone’s will and need to apply for letter of probate – need
permission
• in practice, will ask OA whether can do so – su advice is to get someone else to take up the
job
• handling assets on trust and easy to mix up with own personal assets – can create difficulty
where both beneficiaries and trustee both believe tt own money
• so OA wila dvise to get oen money

Disqualification of bankrupt
130. —(1) In addition to any disqualification under any other written law, a bankrupt shall be disqualified from
being appointed or acting as a trustee or personal representative in respect of any trust, estate or settlement,
except with leave of the court.
(2) Any disqualification to which a bankrupt is subject under this section shall cease when —
(a) the bankruptcy order against him is annulled or rescinded; or
(b) he is discharged under Part VIII.
(3) Any person who acts as a trustee or personal representative while he is disqualified by virtue of subsection (1)
shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $5,000 or to imprisonment
for a term not exceeding 12 months or to both.

Bankruptcy Offences – usu handled by official assignee

- bankrupt x pay debts so courts x impose fine
- std sentence is jail
• prev cases stated tt 3rd party if pay fine, will reduce punitive effect, and offence will be
repeated more often
- • PP v Choong Kian Haw [2002] 4 SLR 776
• • Fines were generally not a suitable means of punishment for bankrupts since they lack the
means to pay the fines themselves. If a 3rd party paid the fines, the punitive effect is
diminished on the offenders
- PP v Teoh Hock Kooi [2004] SGDC 254
• Offence under s.141(1)(a) Bcy Act – obtaining credit. Convicted and sentenced to 18 mths
imprisonment
- PP v Heng Hiang Ngee [ 2004] SGMC 15
• Offences under s.131(1)(b) - unauthorised travelling. Convicted of 3 counts and sentenced to
7 and a half months imprsonment. 56 other counts were taken into consideration for
sentencing.

a) new offences and increased penalties

- Bankrupts recalcitrant, breach legal oblig or uncooperative in admin of bankruptcy subj to prosecution
- S81.6
- S82.1.a
- S82.1.b

Bankrupt’s statement of affairs

81. (6) A bankrupt who —
(a) without reasonable excuse, fails to comply with the obligation imposed by this section;
(b) without reasonable excuse, submits a statement of affairs which does not comply with the prescribed
requirements;
(c) submits a statement of affairs which is false, and which he either knows or believes to be false or does
not believe to be true; or
(d) submits a statement which is misleading in any material particular or contains any material omission,
shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $10,000 or to
imprisonment for a term not exceeding 2 years or to both and, in the case of a continuing offence, to a
further fine not exceeding $200 for every day during which the offence continues after conviction.

Bankrupt to submit accounts

82. —(1) A bankrupt who has not obtained his discharge shall, unless otherwise directed by the Official Assignee
—
(a) submit to the Official Assignee once in every 6 months an account of all moneys and property which have
come to his hands for his own use during the preceding 6 months or such other period as the Official Assignee
may specify; or
(b) pay and make over to the Official Assignee so much of such moneys and property as have not been expended
in the necessary expenses of maintenance of himself and his family.
(2) A bankrupt who fails to comply with subsection (1) (a) or (b) shall be guilty of an offence and shall be liable
on conviction to a fine not exceeding $10,000 or to imprisonment for a term not exceeding 2 years or to both and,
in the case of a continuing offence, to a further fine not exceeding $200 for every day during which the offence
continues after conviction.

- S130.3
- S131.1.a
- S131.1.b
- Part X
Disqualification of bankrupt
130. (3) Any person who acts as a trustee or personal representative while he is disqualified by virtue of
subsection (1) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $5,000 or to
imprisonment for a term not exceeding 12 months or to both.
Disabilities of bankrupt
131. —(1) Where a bankrupt has not obtained his discharge —
(a) he shall be incompetent to maintain any action, other than an action for damages in respect of an injury to his
person, without the previous sanction of the Official Assignee; and
(b) he shall not leave, remain or reside outside Singapore without the previous permission of the Official
Assignee.
(2) A bankrupt who fails to comply with this section shall be guilty of an offence and shall be liable on
conviction to a fine not exceeding $10,000 or to imprisonment for a term not exceeding 2 years or to both.

BANKRUPTCY OFFENCES
Interpretation of this Part
132. In this Part —
(a) references to property comprised in the bankrupt’s estate or to property possession of which is required to be
delivered up to the Official Assignee shall include any property mentioned in section 78 (1);
(b) “initial period” means the period between the making of the bankruptcy application by or against a debtor and
the commencement of his bankruptcy;
(c) a reference to a number of months or years before the making of a bankruptcy application shall be read as a
reference to that period ending with the making of the bankruptcy application; and
(d) “Official Assignee” includes a trustee in bankruptcy appointed under section 33.
Defence of innocent intention
133. In the case of an offence under any provision of this Part, other than sections 135 (e), 137, 140 (2), 142, 143
and 145, a person shall not be guilty of the offence if he proves that, at the time of the conduct constituting the
offence, he had no intent to defraud or to conceal the state of his affairs.
Non-disclosure
134. —(1) A bankrupt shall be guilty of an offence if —
(a) he does not to the best of his knowledge and belief disclose to the Official Assignee all the property
comprised in his estate; or
(b) he does not inform the Official Assignee of any disposal of any property which, but for the disposal, would be
comprised in his estate, stating how, when, to whom and for what consideration the property was disposed of.
(2) Subsection (1) (b) shall not apply to any disposal in the ordinary course of a business carried on by the
bankrupt or to any payment of the ordinary expenses of the bankrupt or his family.
Concealment of property
135. A bankrupt shall be guilty of an offence if —
(a) he does not deliver up possession to the Official Assignee, or as the Official Assignee may direct, of such part
of the property comprised in his estate as is in his possession or under his control of which he is required by law
to deliver up;
(b) he conceals any debt due to or from him or conceals any property the value of which is not less than $500 and
possession of which he is required to deliver up to the Official Assignee;
(c) in the 12 months before the making of the bankruptcy application by or against him, or in the initial period, he
did anything which would have been an offence under paragraph (b) if the bankruptcy order against him had
been made immediately before he did it;
(d) he removes, or in the initial period removed, any property the value of which is or was not less than $500 and
possession of which he is or would have been required to deliver up to the Official Assignee; or
(e) he without reasonable excuse fails, on being required to do so by the Official Assignee or the court —
(i) to account for the loss of any substantial part of his property incurred in the 12 months before the making of
the bankruptcy application by or against him or in the initial period; or
(ii) to give a satisfactory explanation of the manner in which such a loss was incurred.
Concealment of books and papers; falsification, etc.
136. A bankrupt shall be guilty of an offence if —
(a) he does not deliver up possession to the Official Assignee, or as the Official Assignee may direct, of all
books, papers and other records of which he has possession or control and which relate to his estate or his affairs;
(b) he prevents, or in the initial period prevented, the production of any books, papers or records relating to his
estate or affairs;
(c) he conceals, destroys, mutilates or falsifies, or causes or permits the concealment, destruction, mutilation or
falsification of, any books, papers or other records relating to his estate or affairs;
(d) he makes, or causes or permits the making of, any false entries in any book, document or record relating to
his estate or affairs;
(e) he disposes of, or alters or makes any omission in, or causes or permits the disposal, altering or making of any
omission in, any book, document or record relating to his estate or affairs; or
(f) in the 12 months before the making of the bankruptcy application by or against him, or in the initial period, he
did anything which would have been an offence under paragraph (c), (d) or (e) if the bankruptcy order against
him had been made before he did it.
False statements
137. A bankrupt shall be guilty of an offence if —
(a) he makes any false statement or any material omission in any statement under this Act relating to his affairs;
(b) knowing or believing that a false debt has been proved by any person under the bankruptcy, he fails to inform
the Official Assignee as soon as practicable;
(c) he attempts to account for any part of his property by fictitious losses or expenses;
(d) at any meeting of his creditors in the 12 months before the making of the bankruptcy application by or against
him or (whether or not at such a meeting) at any time in the initial period, he did anything which would have
been an offence under paragraph (c) if the bankruptcy order against him had been made before he did it; or
(e) he is, or at any time has been, guilty of any false representation or other fraud for the purpose of obtaining the
consent of his creditors, or any of them, to an agreement with reference to his affairs or to his bankruptcy.
Fraudulent disposal of property
138. —(1) A bankrupt shall be guilty of an offence if —
(a) he makes or causes to be made, or has during the period of 5 years prior to the date of the bankruptcy order
against him made or caused to be made, any gift or transfer of, or any charge on, his property; or
(b) he conceals or removes, or has at any time before the commencement of the bankruptcy concealed or
removed, any part of his property after, or within 2 months before, the date on which a judgment or order for the
payment of money has been obtained against him, being a judgment or order which was not satisfied before the
commencement of his bankruptcy.
(2) In this section, the reference to making a transfer of or a charge on any property includes causing or
conniving at, the levying of any execution against that property.
Absconding with property
139. A bankrupt shall be guilty of an offence if —
(a) he leaves, or attempts or makes preparations to leave, Singapore with any property the value of which is $500
or more and possession of which he is required to deliver up to the Official Assignee; or
(b) in the 12 months before the making of the bankruptcy application by or against him, or in the initial period,
he did anything which would have been an offence under paragraph (a) if the bankruptcy order against him had
been made immediately before he did it.
Fraudulent dealing with property obtained on credit
140. —(1) A bankrupt shall be guilty of an offence if, in the 12 months before the making of the bankruptcy
application by or against him, or in the initial period, he disposed of any property which he had obtained on
credit and, at the time he disposed of it, had not paid for.
(2) A person shall be guilty of an offence if, in the 12 months before the making of the bankruptcy application by
or against a bankrupt or in the initial period, he acquired or received property from the bankrupt knowing or
believing —
(a) that the bankrupt owed money in respect of the property; and
(b) that the bankrupt did not intend, or was unlikely to be able, to pay the money so owed.
(3) A person shall not be guilty of an offence under subsection (1) or (2) if the disposal, acquisition or receipt of
the property was in the ordinary course of a business carried on by the bankrupt at the time of the disposal,
acquisition or receipt.
(4) In determining for the purposes of this section whether any property is disposed of, acquired or received in
the ordinary course of a business carried on by the bankrupt, regard may be had, in particular, to the price paid
for the property.
(5) In this section, any reference to disposing of property shall be read as including pawning or pledging of such
property, and any reference to acquiring or receiving property shall be read accordingly.
Obtaining credit; engaging in business
141. —(1) A bankrupt shall be guilty of an offence if, being an undischarged bankrupt —
(a) either alone or jointly with any other person, he obtains credit to the extent of $500 or more from any person
without informing that person that he is an undischarged bankrupt; or
(b) he engages in any trade or business under a name other than that under which he was adjudicated bankrupt
without disclosing to all persons with whom he enters into any business transaction the name under which he was
adjudicated bankrupt.
(2) In this section, any reference to a bankrupt obtaining credit shall be read as including any case in which —
(a) goods are bailed to him under a hire-purchase agreement; and
(b) he is paid in advance (whether in money or otherwise) for the supply of goods or services.
Failure to keep proper accounts of business
142. —(1) A bankrupt shall be guilty of an offence if, having been engaged in any business within 2 years before
the making of the bankruptcy application by or against him, he has not —
(a) kept proper accounting records throughout that period and throughout any part of the initial period in which
he was so engaged; or
(b) preserved all the accounting records which he has kept.
(2) For the purposes of this section, a person shall be deemed not to have kept proper accounting records if he
has not kept such records as are necessary to show or explain his transactions and financial position in his
business, including —
(a) records containing entries from day to day, in sufficient detail, of all cash paid and received;
(b) where the business involved dealings in goods, statements of annual stock-takings; and
(c) except in the case of goods sold by way of retail trade to the actual customer, records of all goods sold and
purchased showing the buyers and sellers in sufficient detail to enable the goods and the buyers and sellers to be
identified.
(3) A bankrupt shall not be guilty of an offence under subsection (1) —
(a) if his unsecured liabilities at the commencement of the bankruptcy did not exceed $10,000; or
(b) if he proves that in the circumstances in which he carried on business the omission was honest and excusable.
Gambling
143. —(1) A bankrupt shall be guilty of an offence if he has —
(a) in the 2 years before the making of the bankruptcy application by or against him, materially contributed to, or
increased the extent of, his insolvency by gambling or by rash and hazardous speculations; or
(b) in the initial period, lost any part of his property by gambling or by rash and hazardous speculations.
(2) In determining for the purposes of this section whether any speculation was rash and hazardous, the financial
position of the bankrupt at the time when he entered into them shall be taken into consideration.
Bankrupt incurring debt without reasonable ground of expectation of being able to pay it
144. A bankrupt shall be guilty of an offence if —
(a) within 12 months before the making of a bankruptcy application by or against him or during the initial period,
he incurs any debt provable in bankruptcy; or
(b) having been engaged in carrying on any trade or business, he continues to trade or carry on business by
incurring any debt provable in bankruptcy within 12 months before the date of the making of a bankruptcy
application by or against him or during the initial period, he being insolvent on the date of incurring the debt,
without any reasonable ground of expectation of being able to pay it.
Making of false claims, etc.
145. —(1) Any creditor in any bankruptcy, composition or arrangement with creditors shall be guilty of an
offence if he makes any claim, proof, declaration or statement of account which is untrue in any material
particular unless he satisfies the court that he had no intent to defraud.
(2) A creditor shall be guilty of an offence if he obtains or receives any money, property or security from any
person as an inducement for forbearing to oppose, or for consenting to, the discharge of a bankrupt.
(3) A person shall be guilty of an offence if he, knowing that a bankruptcy order has been made against a debtor,
removes, conceals, receives or otherwise deals with or disposes of any part of the property of the debtor, with
intent to defeat the order.
(4) Fines imposed and levied under this section shall be deemed to be part of the property of the bankrupt and
shall vest in the Official Assignee.
Penalty
146. A person guilty of any offence under this Part shall be liable on conviction to a fine not exceeding $10,000
or to imprisonment for a term not exceeding 3 years or to both.
Supplementary provisions
147. —(1) It shall not be a defence in proceedings for an offence under this Act that anything relied on, in whole
or in part, as constituting that offence was done outside Singapore.
(2) In a charge for an offence under this Act, it shall be sufficient to set forth the substance of the offence charged
in the words of this Act, specifying the offence or as near thereto as circumstances admit, without alleging or
setting forth any debt, demand, application or any proceedings in, or order, warrant or document of any court
acting under this Act.
(3) Where a bankrupt has been guilty of any offence under this Act, he shall not be exempt from being proceeded
against therefor by reason that he has obtained his discharge or that the bankruptcy order made against him has
been annulled or rescinded.

b) power of entry and seizure

- OA empowered to enter bankrupt’s premies, search and take inventory and seize assets without court order
or search warrant

c) power to impound passports

- OA empoewered to
o Impound bnmkrupts’ passports
o Direct controller ofimmigration to prevent bankrupts fr leaving sg

Objective 5 – MAXIMIZE RECOVERY OF ASSETS

a) control of secured creditors

- under old act secured creditors x disclose security or delayed or refused to realize secured asets – to
detriment of unsecred creditors and bankrupts since surplus fr proceeds of realization substantially eroded
by claims for outstanding interests
- s63 – req secured creditor whoy present bankrptyc petition against debtor to state willigness to surrender
security to OA for general benfit of creditors or give est of security
o failure => security surrendered for gnerla benfit of creditors

Where applicant for bankruptcy order is secured creditor

63. —(1) Where the applicant for a bankruptcy order is a secured creditor of the debtor, he shall in his
application —
(a) state that he is willing, in the event of a bankruptcy order being made, to give up his security for the benefit of
the other creditors of the bankrupt; or
(b) give an estimate of the value of his security, in which case he may to the extent of the balance of the debt due
to him, after deducting the value so estimated, be admitted as a creditor in the same manner as if he were an
unsecured creditor.
(2) Where an applicant for a bankruptcy order who is a secured creditor of the debtor fails to disclose his security
in the application, he shall be deemed to have given up his security for the benefit of the other creditors of the
debtor and upon the making of a bankruptcy order —
(a) he shall not be entitled to enforce his security against the estate of the bankrupt or to retain any proceeds from
the realisation of such security; and
(b) he shall execute such document of release as is required by the Official Assignee or account and pay over to
the Official Assignee all proceeds from any realisation of his security.
(3) Where any secured creditor fails to execute any document of release as is required by the Official Assignee
under subsection (2) (b), the Official Assignee may execute the document on his behalf and the execution of the
document by the Official Assignee shall have the same effect as the execution thereof by the secured creditor.
(4) Any secured creditor who fails to account or pay over to the Official Assignee the proceeds from any
realisation of his security under subsection (2) (b) shall be guilty of an offence and shall be liable on conviction
to a fine not exceeding $15,000 or to imprisonment for a term not exceeding 3 years or to both.
(5) Any fine imposed under subsection (4) shall be deemed part of the property of the bankrupt and shall vest in
the Official Assignee for the purposes of this Act.

- once bankruptcy order made, secured creditor x permitted to enforce security or retain proceeds fr
reasliation of secuiryt
- OA may direct him to execute docs of release and acct for proceeds of realization of security
- OA also empowered to eecute doc of release on secured creditors’ behalf
o Failure to do so is offence punishable on conviction with fine up to 15,000 or imprisonment not
exceeding 3 yrs or both
- S76.4 – secured creditors must realize security within 6 mths after bankruptcy order or suth further period as
may be allowed by OA
o Failure => creditors deprived of interest on secured debt after date of bankruptcy order
o Bankruptcy rules aso contain provn regulating declaration of securities when secured creditors file
or register proofs of debt against bankruptcy estate
b) insolvency assistance fund
- S165 – estment of fund
- Novel mechanism to finance itigation on behslf of bankruptcy estate where bankrupt has gd claim for
recovery of assets but x afford to commence or maintain proceedings
- Financing of fund comes fr unclaimed monies received under s164 and costs recovered by official assignee
in any proceedings taken under bankruptcy act n which monies fr fund utilized
- Fund may be applied -
o To fund costs of procedigns on behalf of bankrupt’s estaes or to recover assets
o To fund admin of bankruptcy estate as OA may determine
o Remunerate special managers appted to manage bankrupt’s estate, business or interests
o For such other purposes as may be prescribed by minister
- Fund x applied if
o OA not satisfied as t merit of action
o Sufficient monies in bankruptcy estat

Insolvency Assistance Fund

165. —(1) The Official Assignee shall maintain and administer a fund to be known as the Insolvency Assistance
Fund (referred to in this section as the Fund) in accordance with such rules as may be prescribed.
(2) There shall be paid into the Fund —
(a) all unclaimed moneys referred to in section 164 (3); and
(b) all costs and fees recovered by the Official Assignee in any proceedings taken under this Act in which
moneys from the Fund were applied.
(3) Subject to subsections (4) and (6), the Fund may be applied by the Official Assignee for all or any of the
following purposes:
(a) for the remuneration of special managers appointed under section 113;
(b) for the payment of all costs, fees and allowances to solicitors and other persons in proceedings on behalf of a
bankrupt’s estate or to recover assets of the estate;
(c) for the payment of such costs and fees in the administration of a bankrupt’s estate as the Official Assignee
may determine;
(d) for such other purposes as may be prescribed.
(4) If any claimant makes any demand against the Official Assignee for any amount of unclaimed moneys paid
into the Fund under subsection (2) (a), the Minister may direct that payment of that amount, free of interest, be
made to the claimant out of the Consolidated Fund.
(5) No moneys from the Fund shall be applied for any proceedings where, in the opinion of the Official Assignee,
there is no reasonable ground for taking, defending, continuing or being a party to the proceedings or where there
are sufficient moneys for such purpose in the bankrupt’s estate.
(6) The Minister may from time to time pay such sums of moneys in the Fund into the Consolidated Fund as he
may determine.

c) undervalue transactions s98

- Consideration at sigf less value
- In consideration of marriage
- Gifts
- Transaction taken place within 5 yrs ending with presentation of petition
- Debtor must be insolvent at itme of tranaction or as result of transaction
- Presumotn of insolvency if entered with an associate

Transactions at an undervalue
98. —(1) Subject to this section and sections 100 and 102, where an individual is adjudged bankrupt and he has
at the relevant time (as defined in section 100) entered into a transaction with any person at an undervalue, the
Official Assignee may apply to the court for an order under this section.
(2) The court shall, on such an application, make such order as it thinks fit for restoring the position to what it
would have been if that individual had not entered into that transaction.
(3) For the purposes of this section and sections 100 and 102, an individual enters into a transaction with a person
at an undervalue if —
(a) he makes a gift to that person or he otherwise enters into a transaction with that person on terms that provide
for him to receive no consideration;
(b) he enters into a transaction with that person in consideration of marriage; or
(c) he enters into a transaction with that person for a consideration the value of which, in money or money’s
worth, is significantly less than the value, in money or money’s worth, of the consideration provided by the
individual.

d) unfair preferences s99

- Pref given to creditor, surety or guarantor
- Putting recipient in better position than otherwise
- Debtor desirous of according better status to recipient
- Insolvent at time of tranaction or due to tranaction
- Unfair pref msut have taken place iwhtin 2 yrs ending with date of presentation of bankruptcy petition
where recipient is associate
- Within 6 mths in al other cases

Unfair preferences
99. —(1) Subject to this section and sections 100 and 102, where an individual is adjudged bankrupt and he has,
at the relevant time (as defined in section 100), given an unfair preference to any person, the Official Assignee
may apply to the court for an order under this section.
(2) The court shall, on such an application, make such order as it thinks fit for restoring the position to what it
would have been if that individual had not given that unfair preference.
(3) For the purposes of this section and sections 100 and 102, an individual gives an unfair preference to a person
if —
(a) that person is one of the individual’s creditors or a surety or guarantor for any of his debts or other liabilities;
and
(b) the individual does anything or suffers anything to be done which (in either case) has the effect of putting that
person into a position which, in the event of the individual’s bankruptcy, will be better than the position he would
have been in if that thing had not been done.
(4) The court shall not make an order under this section in respect of an unfair preference given to any person
unless the individual who gave the preference was influenced in deciding to give it by a desire to produce in
relation to that person the effect mentioned in subsection (3) (b).
(5) An individual who has given an unfair preference to a person who, at the time the unfair preference was
given, was an associate of his (otherwise than by reason only of being his employee) shall be presumed, unless
the contrary is shown, to have been influenced in deciding to give it by such a desire as is mentioned in
subsection (4).
(6) The fact that something has been done in pursuance of the order of a court does not, without more, prevent
the doing or suffering of that thing from constituting the giving of an unfair preference.

COMMON ASSETS REALISED

- bank accounts
- private properties
- jewelleries
• occur when bankrupts place this in afe dpoesit box – this will be frozen and OA will send
someone to open it up and check assets
• jt dsafe deposit box where one owner bankrupt
 – if so, everything inside belongs to the bankrupt as starting pt
 then to sort out what belongs to bankrupt and what doesn’t
 see on case by case basis eg other claimant to provide receipts of sale etc to prove tt
it is hers
- motor vehicles
- insurance policies (unless protected under Section 73 of Conveyancing and Law of Property Act)
• beneficiary - under certain cirucsmntnaves trusts created under s73 – when this happens then x
come under bankrupt assets and juris of OA

Moneys payable under policy of assurance not to form part of the estate of the insured.
73. —(1) A policy of assurance effected by any man on his own life and expressed to be for the benefit of his
wife or of his children or of his wife and children or any of them, or by any woman on her own life and
expressed to be for the benefit of her husband or of her children or of her husband and children or any of them,
shall create a trust in favour of the objects therein named, and the moneys payable under any such policy shall
not, so long as any object of the trust remains unperformed, form part of the estate of the insured or be subject to
his or her debts.
(2) If it is proved that the policy was effected and the premiums paid with intent to defraud the creditors of the
insured, they shall be entitled to receive out of the moneys payable under the policy a sum equal to the premiums
so paid.
(3) The insured may, by the policy or by any memorandum under his or her hand, appoint a trustee or trustees of
the moneys payable under the policy, and from time to time appoint a new trustee or new trustees thereof, and
may make provision for the appointment of a new trustee or new trustees thereof and for the investment of the
moneys payable under any such policy.
(4) In default of any such appointment of a trustee, the policy immediately on its being effected shall vest in the
insured and his or her legal personal representatives in trust for the purposes aforesaid.
(5) If at the time of the death of the insured or at any time afterwards there is no trustee, or it is expedient to
appoint a new trustee or new trustees, a trustee or trustees or a new trustee or new trustees may be appointed by
the High Court.
(6) The receipt of a trustee or trustees duly appointed or, in default of any such appointment or in default of
notice to the insurance office, the receipt of the legal personal representative of the insured, shall be a discharge
to the office for the sum secured by the policy or for the value thereof in whole or in part.

• Bankrupt’s tools of trade, basic necessities

• (Section 78(2), HDB flat (Section 51 of Housing & Development Act) and CPF moneys
(Section 24 of CPF Act) are protected from his creditors
• these will not be seized

objective 6 – REGIME FOR EASIER DISCHARGES FR BANKRUPTCY

- rationale for easy discharge
o re shackleton, ex parte shackleton cave J – if impose burden preventing amn fr bettering
position, wil not make effort to do so
o prof jayakumar, minister for law – main weakness of present legis (before amendment) is diff
of obt discharge fr bankruptcy – not possible unless satisfies debts in full or proposes scheme
of arrangement or composition acceptable to creditor; most creditors x prepared to accept.
Little incentive for bankrupts to seek actively discharge in disclosing assets and cooperating
with official assignee
- No automatic discharge in Singapore. In HK, there is automatic discharge after 3 years

DISCRETIONARY DISCHARGE
- Our bankruptcy regime provides discretionary discharge and not automatic discharge as in many
other countries such as UK, New Zealand, Australia and Hong Kong
• is not that easy to obtain discharge for bankruptcy
- Singaporeans know that they cannot use bankruptcy to shield themselves from creditors and if they
become bankrupt it will not be easy for them to obtain discharge from bankruptcy
Is Singapore Taking the Right Approach under Section 125 BA?
• 34 cases of application filed by creditors to prohibit the OA from issuing the Certificate of Discharge – none
allowed by the High Court
• Of the 7,997 certificates issued as at 31 Dec 2001, only 37% or 0.46% of the bankrupts discharged entered
into second bankruptcy
• This shows that the OA has adopted the right criteria in exercising his discretion to discharge bankrupts.

WAYS BY WHICH A BANKRUPT CAN GET OUT OF BANKRUPTCY

1. By making 100% payment of his debts (Sections 123 & 123A) => annulment of bankruptcy order
Court’s power to annul bankruptcy order
123. —(1) The court may annul a bankruptcy order if it appears to the court that —
(a) on any ground existing at the time the order was made, the order ought not to have been made;
(b) to the extent required by the rules, both the debts and the expenses of the bankruptcy have all, since the
making of the order, either been paid or secured for to the satisfaction of the court;
(c) proceedings are pending in Malaysia for the distribution of the bankrupt’s estate and effects amongst the
creditors under the bankruptcy law of Malaysia and that the distribution ought to take place there; or
(d) a majority of the creditors in number and value are resident in Malaysia, and that from the situation of the
property of the bankrupt or for other causes his estate and effects ought to be distributed among the creditors
under the bankruptcy law of Malaysia.
(2) The court may annul a bankruptcy order whether or not the bankrupt has been discharged from the
bankruptcy.
(3) Where a court annuls a bankruptcy order under this section, any sale or other disposition of property, payment
made or other things duly done by or under the authority of the Official Assignee or by the court shall be valid
except that the property of the bankrupt shall vest in such person as the court may appoint or, in default of any
such appointment, revert to the bankrupt on such terms as the court may direct.
(4) The court may include in its order such supplemental provisions as may be authorised by the rules.

Annulment of bankruptcy order by certificate of Official Assignee where debts and expenses fully paid
123A. —(1) The Official Assignee may issue a certificate annulling a bankruptcy order if it appears to the
Official Assignee that, to the extent required by the rules, the debts which have been proved and the expenses of
the bankruptcy have all, since the making of the order, been paid.
(2) Notice of every certificate of annulment under subsection (1) shall be given to the Registrar and be published
in the Gazette and advertised in any local newspaper.
(3) The Official Assignee shall, upon an application of a bankrupt or his creditor or any other interested person,
issue to the applicant a copy of the certificate of annulment upon the payment of the prescribed fee.
(4) A certificate of annulment issued under subsection (1) shall be binding on all the creditors so far as it relates
to any debts due to them from the bankrupt and provable in bankruptcy.
(5) Where the Official Assignee annuls a bankruptcy order under this section, any sale or other disposition of
property, payment made or other things duly done by or under the authority of the Official Assignee or by the
court shall be valid except that the property of the bankrupt shall revert to the bankrupt or, on an application by
any person interested, vest in such person as the court may appoint and on such terms as the court may direct.
(6) The court may include in its order such supplemental provisions as may be authorised by the rules.

2. By making offer of composition or scheme of arrangement (Section 95A)

Offer of arrangement: for some reason, you want to prefer certain creditors
o e.g. X took some money from some charitable organisation
o and there were also banks asking for $ against her
o what can be done is to put to the creditors that she would pay 100% to the charitable organisation,
and the rest to share the remaining pari passu

Annulment of bankruptcy order by certificate of Official Assignee where composition or scheme accepted
by creditors
95A. —(1) Where a composition or scheme is accepted by the creditors by a special resolution under section 95,
the Official Assignee may annul the bankruptcy order by issuing a certificate of annulment.
(2) Notice of every annulment under subsection (1) shall be given to the Registrar and be published in the
Gazette and advertised in any local newspaper.
(3) The Official Assignee shall, upon the application of a bankrupt or his creditor or any other interested person,
issue to the applicant a copy of the certificate of annulment upon the payment of the prescribed fee.
(4) A certificate of annulment issued under subsection (1) shall be binding on all the creditors so far as it relates
to any debts due to them from the bankrupt and provable in bankruptcy.
(5) The provisions of a composition or scheme under this section may be enforced by the court on an application
by any person interested, and any contravention of or failure to comply with an order of the court made on such
an application shall be deemed to be a contempt of court.
(6) If default is made in payment of any instalment due under the composition or scheme, or if the court is
satisfied that the composition or scheme cannot, in consequence of legal difficulties or for any sufficient cause,
proceed without injustice or undue delay to the creditors or to the bankrupt, or that the acceptance of the proposal
by the creditors was obtained by fraud, the court may, if it thinks fit, on an application by the Official Assignee or
any creditor, annul the composition or scheme by revoking the certificate of annulment, but without prejudice to
the validity of any sale, disposition or payment duly made or thing duly done under or in pursuance of the
composition or scheme.
(7) Where the Official Assignee annuls a bankruptcy order under this section, any sale or other disposition of
property, payment duly made or other things duly done by or under the authority of the Official Assignee or by
the court shall be valid except that the property of the bankrupt shall revert to the bankrupt or, on an application
by any person interested, vest in such person as the court may appoint and on such terms as the court may direct.
(8) The court may include in its order such supplemental provisions as may be authorised by the rules.

Annulment By Composition Or Scheme Of Arrangement (Section 95a) – see diag

- Official Assignee issues Certificate of Annulment
- Service of proposal to creditor
- Creditors consider proposal & reply in writing within 21 days
- If creditors accept proposal by special resolution
• (A majority of creditors in number representing more than 75% of the proved debts)
• If creditors reject and no special resolution, proposal fails
- Offer of composition: offer X % of the debt that I owe to you… offer of composition must be offered to
ALL the creditors, no one to be preferred
- ==> NB: the acceptance of the composition or scheme by the creditors [s95 BA] is a condition precedent
to the OA’s annulment of the bankruptcy by a certificate [s95A BA]

Procedure:
- Bankrupt makes proposal for Composition/Scheme of Arrangement through the OA
- Service of proposals to creditors who have proved debt
- Creditors, upon receipt of proposal, will have 21 days to reply
o 2 types of meeting
o general meeting of creditors - meeting to be summoned by OA with not less than 21 days’
notice [s95(2) BA]
 resolution in writing
- special resolution to be sought by OA giving 21 days reply [s95(3) BA]
- the law provides that if the creditor does not reply within 21 days, he is deemed to have accepted the
proposal [section 21/61?]

- If creditors accept proposal by special resolution i.e. majority in number and at least ¾ in vale of creditors
who have proved their debts (those not present taken to have consented)
- If Creditors reject and no special resolution, proposal fails

- Must have majority in number, and this majority must constitute 75%
- i.e. “a majority in number of at least three-fourths in value of the creditors who have proved their debts”
[see s95(8) BA]
o e.g. there are 5 creditors, owed $100,000
- and 3 vote for it… there must be at least $75,000 among the 3
- this of course, is for situations when there is no certification of annulment by the Registrar

3. By applying to the Court for discharge (Section 124)

- most common
- OA makes the application in maj of cass once satisfied when administration is done
- Inso me cases bankrupt himself applies
- But rarely done because if OA hasn’t finished admin, will state so in report (obliged to makereport); report
will state tt still has left in aminidstration of assets
- Court will normally not make discharge in such a case

Discharge by court
124. —(1) The Official Assignee, the bankrupt or any other person having an interest in the matter may, at any
time after the making of a bankruptcy order, apply to the court for an order of discharge.
(2) Every such application shall be served on each creditor who has filed a proof of debt and on the Official
Assignee if he is not the applicant, and the court shall hear the Official Assignee and any creditor before making
an order of discharge.
(3) Subject to subsection (4) on an application under this section, the court may —
(a) refuse to discharge the bankrupt from bankruptcy;
(b) make an order discharging him absolutely; or
(c) make an order discharging him subject to such conditions as it thinks fit to impose, including conditions with
respect to —
(i) any income which may be subsequently due to him; or
(ii) any property devolving upon him, or acquired by him, after his discharge,
as may be specified in the order.
(4) Where the bankrupt has committed an offence under this Act or under section 421, 422, 423 or 424 of the
Penal Code (Cap. 224) or upon proof of any of the facts mentioned in subsection (5), the court shall —
(a) refuse to discharge the bankrupt from bankruptcy;
(b) make an order discharging him subject to his paying a dividend to his creditors of not less than 25% or to the
payment of any income which may be subsequently due to him or with respect to property devolving upon him,
or acquired by him, after his discharge, as may be specified in the order and to such other conditions as the court
may think fit to impose; or
(c) if it is satisfied that the bankrupt is unable to fulfil any condition specified in paragraph (b) and if it thinks fit,
make an order discharging the bankrupt subject to such conditions as the court may think fit to impose.
(5) The facts referred to in subsection (4) are —
(a) that the bankrupt has omitted to keep such books of accounts as would sufficiently disclose his business
transactions and financial position within the 3 years immediately preceding his bankruptcy, or within such
shorter period immediately preceding that event as the court may consider reasonable in the circumstances;
(b) that the bankrupt has continued to trade after knowing or having reason to believe himself to be insolvent;
(c) that the bankrupt has contracted any debt provable in the bankruptcy without having at the time of contracting
it any reasonable ground of expectation (proof whereof shall lie on him) of being able to pay it;
(d) that the bankrupt has brought on or contributed to his bankruptcy by rash speculations or extravagance in
living, or by recklessness, or want of reasonable care and attention to his business and affairs;
(e) that the bankrupt has delayed or put any of his creditors to unnecessary expense by a frivolous or vexatious
defence to any action or other legal proceedings properly brought or instituted against him;
(f) that the bankrupt has within 3 months preceding the date of the bankruptcy order, when unable to pay his
debts as they became due, given an undue preference to any of his creditors;
(g) that the bankrupt has, in Singapore or elsewhere on any previous occasion, been adjudged bankrupt or made a
composition or arrangement with his creditors;
(h) that the bankrupt has been guilty of any fraud or fraudulent breach of trust;
(i) that the bankrupt has, within 3 months immediately preceding the date of the bankruptcy order, sent goods out
of Singapore under circumstances which afford reasonable grounds for believing that the transaction was not a
bona fide commercial transaction;
(j) that the bankrupt’s assets are not of a value equal to 20% of the amount of his unsecured liabilities, unless he
satisfies the court that the fact that the assets are not of a value equal to 20% of his unsecured liabilities has
arisen from circumstances for or in respect of which he cannot firstly be held blamable;
(k) that the bankrupt has entered into a transaction with any person at an undervalue within the meaning of
section 98;
(l) that the bankrupt has given an unfair preference to any person within the meaning of section 99; and
(m) that the bankrupt has made a general assignment to another person of his book debts within the meaning of
section 104.
(6) The court may, at any time before an order of discharge takes effect, rescind or vary the order.

- Application to the Court can be made by :

 Bankrupt
 The Official Assignee
 Any interested party
- Application served on creditors who have proved debt and OA (i.e. if OA not applicant)
- Hearing in Court
• The court considers the report of the OA (i.e. “hears the OA and any creditor before making
order”[s124(2) BA], and all other relevant affairs and conduct under s124 BA

- Bankrupt has not committed any offences under S421-424 of the Penal Code, THE COURT MAY
 • Grant a conditional discharge – rarel; usu means tt admin not completed, so cannot be
diwcahged anyway. Diff for OA because need to monitor the case and may aks for info; and
bankrupt may claim tt already discharged on condition => practical difficulties
• Grant an absolute discharge
• Dismiss application

- Bankrupt has committed offence under S421-424 of the Penal Code, THE COURT MAY
• Grant a discharge subject to payment of 25% dividend or may impose other terms
• The Court may give an absolute discharge if it is satisfied that bankrupt is unable to comply
with above
o Possible condition – payment of a certain amount every month.
o S421-424 Penal Code – Fraud related offences.

Dishonest or fraudulent removal or concealment of property to prevent distribution among creditors.

421. Whoever dishonestly or fraudulently removes, conceals, or delivers to any person, or transfers or
causes to be transferred to any person, without adequate consideration, any property, intending thereby to
prevent, or knowing it to be likely that he will thereby prevent, the distribution of that property according to
law among his creditors or the creditors of any other person, shall be punished with imprisonment for a term
which may extend to 2 years or with fine, or with both.

Dishonestly or fraudulently preventing a debt or demand due to the offender from being made
available for his creditors.
422. Whoever dishonestly or fraudulently prevents any debt or demand due to himself or to any other
person from being made available according to law for payment of his debts or the debts of such other
person, shall be punished with imprisonment for a term which may extend to 2 years, or with fine, or with
both.

Dishonest or fraudulent execution of deed of transfer containing a false statement of consideration.

423. Whoever dishonestly or fraudulently signs, executes, or becomes a party to any deed or instrument
which purports to transfer or subject to any charge any property, or any interest therein, and which contains
any false statement relating to the consideration for such transfer or charge, or relating to the person or
persons for whose use or benefit it is really intended to operate, shall be punished with imprisonment for a
term which may extend to 2 years, or with fine, or with both.

Dishonest or fraudulent removal or concealment of property or release of claim.

424. Whoever dishonestly or fraudulently conceals or removes any property of himself or any other person,
or dishonestly or fraudulently assists in the concealment or removal thereof, or dishonestly releases any
demand or claim to which he is entitled, shall be punished with imprisonment for a term which may extend
to 2 years, or with fine, or with both.

DISCHARGE BY THE COURT UNDER S.124 –

Re Siah Ooi Choe [1998]1 Slr 903

- Siah Ooi Choe, a prominent businessman in manufacturing multi-layed plastic film was made a
bankrupt during the recession in 1986.
- total liability : $140m
- made regular instalments payment into his estate and proposed to sell his flat to settle his debts – total
contribution : $479,000
- The bankrupt applied to the Court for discharge in 1997 when he was 50 years old and a diabetic
(relevant pts considered by the court)
- Majority of creditors objected

- Warren Khoo J held that there was no reason for a refusal to discharge the bankrupt because :
• the bankrupt was 50 years old and a diabetic
• he paid regular instalments into his estate
• he sold his flat to raise funds to settle his debts (which he ws not obliged to do)
• the cause of bankruptcy was economic downturn (as opposed to mismanagement of funds
for eg – courts more sympathetic to such causes where merely bad luck)
• he co-operated fully with the Official Assignee (ie provided info fully when asked to do so,
and when asked for opinion, frank and x try to hide things) OA pays a lot of attention to this

Re Jeyaretnam Joshua Benjamin, ex parte Indra Krishnan (No 2) [2004] 3 SLR 133
- Facts
• This was an appeal against the assistant registrar’s dismissal of the appellant’s application to
have a bankruptcy order against him discharged under s 124 of the Bankruptcy Act
- 2 grounds of appeal.
• The appellant offered to pay up to 20% of the debt, but was willing to increase it to 25%
if ordered by the court.
• He alleged that the real reason for the objection to his application was a political one (ie
that they did not want him to recover his seat in Parliament).
- • Counsel for opposing creditors submitted that the appellant had suppressed vital information on his
assets from the OA, namely, his interests and entitlement in a Johor Bahru property which were being
disputed by other claimants and beneficiaries to his sister’s estate.
- • The OA also objected and submitted that the appellant had been uncooperative
- Held:
• The administration of the appellant’s assets had not been completed. The appellant’s claims in
Johor Bahru were being disputed, and there was a serious threat of litigation. In the
circumstances, it would not be fair to thecreditors if the bankruptcy order was discharged:
• In the present circumstances, 3 years was too soon for the bankruptcy order to be discharged,
although it might have been different if the assets had been fully ascertained and administered,
and the OA was supportive of the application to discharge
- Property claimed by debtor and happened to be quite large (landed bungalow in johor bahru)
- Case stil under admin

4. By obtaining a Certificate of Discharge from the Official Assignee (Section 125)

Discharge by certificate of Official Assignee

125. —(1) The Official Assignee may, in his discretion and subject to section 126, issue a certificate discharging
a bankrupt from bankruptcy.
(2) The Official Assignee shall not issue a certificate discharging a bankrupt from bankruptcy under subsection
(1) unless —
(a) a period of 3 years has lapsed since the date of commencement of the bankruptcy; and
(b) the debts which have been proved in bankruptcy do not exceed $500,000*, or such other sum as may be
prescribed.
*see — Bankruptcy (Variation of Sum of Debts under section 125 (2) (b)) Rules 1999 (S 126/99).
(3) Notice of every discharge under subsection (1) shall be given to the Registrar and be published in the
Gazette and advertised in any local newspaper.
(4) The Official Assignee shall, upon the application of a bankrupt or his creditor or other interested person, issue
to the applicant a copy of the certificate of discharge upon the payment of the prescribed fee.

Objection by creditor to discharge of bankrupt under section 125

126. —(1) Before issuing a certificate of discharge under section 125, the Official Assignee shall serve on each
creditor who has filed a proof of debt a notice of his intention to discharge the bankrupt, together with a
statement of his reasons for wanting to do so.
(2) A creditor who has been served with a notice under subsection (1) and who wishes to enter an objection to the
Official Assignee issuing a certificate discharging the bankrupt may, within 21 days from the date of the Official
Assignee’s notice, furnish the Official Assignee a statement of the grounds of his objection.
(3) A creditor who does not furnish to the Official Assignee a statement of the grounds of his objection in
accordance with subsection (2) shall be deemed to have no objection to the discharge.
(4) A creditor who has furnished the Official Assignee with a statement of the grounds of his objection in
accordance with subsection (2) may, within 21 days of being informed by the Official Assignee that his objection
has been rejected, make an application to the court for an order prohibiting the Official Assignee from issuing a
certificate.
(5) Every application under subsection (4) shall be served on the Official Assignee and on the bankrupt and the
court shall hear the Official Assignee and the bankrupt before making an order on the application.
(6) On an application made under subsection (4), the court may, if it thinks it just and expedient —
(a) dismiss the application;
(b) make an order that the bankrupt be not granted a certificate of discharge by the Official Assignee for a period
not exceeding 2 years; or
(c) make an order permitting the Official Assignee to issue a certificate discharging the bankrupt but subject to
such conditions as the court may think fit to impose, including conditions with respect to —
(i) any income which may be subsequently due to the bankrupt after his discharge; or
(ii) any property devolving upon the bankrupt, or acquired by him after his discharge,
as may be specified in the order.

Statutory conditions to be complied with

- • A period of three (3) years have elapsed since the date of bankruptcy
- • Debts which have been proved in bankruptcy do not exceed $500,000.00
• person may have certain claim more than 0.5 million but OA may reject the debts
• so if in the end debts are accepted and less than half million then will be discharged
- • The Official Assignee may, in his discretion, issue a Certificate discharging a bankrupt from bankruptcy

Factors which the official assignee will consider in granting a certificate of discharge
- • The cause of the bankruptcy
- • The age of the bankrupt and the number of years he has been in bankruptcy
- • The bankrupt’s conduct in bankruptcy
- • His assets and contributions to the bankruptcy estate
- • The extent of his co-operation with the Official Assignee
- • The interest of all parties including public interest

Re ng lai wat
Facts
The Housing and Development Board (HDB) obtained judgment in default of appearance against Ng. After
receiving no satisfaction on the judgment, HDB issued a bankruptcy notice against Ng and obtained adjudication
and receiving orders against him. On 15 July 1995, the new Bankruptcy Act 1995 (Cap 20, 1996 Ed) (‘the Act’)
came into operation, and the Official Assignee (OA), in the exercise of his powers under s 125 of the Act,
selected Ng as a suitable candidate for discharge by certificate. HDB then applied under s 126(4) of the Act for
the following orders: (a) an order prohibiting the OA from issuing the certificate of discharge to Ng pursuant to s
125 of the act; in the alternative (b) an order that the certificate of discharge be subject to the condition that the
HDB be entitled to the net proceeds of sale of Ng’s share of theproperty in the event that Ng sold or divested his
share and interest in the flat after his discharge.

Held, allowing the appeal

(1) The sale proceeds of Ng’s flat would not be divisible amongst his creditors because s 78(2)(d) of the Act
excluded from the definition of property divisible among a bankrupt’s creditors property of the bankrupt which
was excluded under any other written law. This meant that Ng’s flat was not available for distribution by the OA.
Looking at s 51 of the HDB Act (Cap 129), it was clear that no HDB flat shall be attached in execution of a
decree of any court.
(2) A conditional release of Ng would be tantamount to the HDB, as creditor circumventing the HDB Act and
attempting to obtain indirectly what it could not do directly. A conditional release of Ng would also contravene s
78(2)(d) of the Act. It would be a strange anomaly if the ‘hands of’ principle on creditors for HDB flats
prevailing at the time of bankruptcy did not apply when the bankrupt was being discharged from bankruptcy.
There was no reason why a discharged bankrupt should be worse off than one who remained a bankrupt.
(3) It would be a grave injustice to Ng for the court to treat the HDB differently from any other unsecured
creditors. The decision of the court below was set aside, and the OA’s appeal was allowed with costs.

DISCHARGE UNDER THE NEW BANKRUPTCY REGIME

Re Ng Lai Wat1

ONE of the important reforms introduced by the new Bankruptcy Act2 (‘the
Act’) is that the Official Assignee has the power to issue a certificate
discharging a bankrupt from bankruptcy in certain circumstances.3 A
creditor of the bankrupt may object to this and, if his objection is rejected
by the Official Assignee, he may make an application to the Court.4 The
Court is given wide powers to deal with such an application. One of the
orders it may make is to permit the issue of the certificate but subject to
such conditions as it thinks fit, including conditions with respect to any
income which may be subsequently due to the bankrupt after his discharge
or any property devolving upon the bankrupt or acquired by him after his
discharge.5
In Re Ng Lai Wat, the Singapore High Court had to deal with such an
application by a bankrupt’s creditor for the first time and, incidentally, on
a rather interesting set of facts. Ng had been bankrupt for more than 6 years,6
his main debt being a judgment debt owed to the Housing Development
Board (‘HDB’). Ng also had a share in an HDB flat, the value of which
had appreciated from the original purchase price of $35,000 to $135,000.
The Official Assignee decided to discharge Ng unconditionally and HDB
applied to the Court objecting to this. The Deputy Registrar decided that
the certificate of discharge should be made subject to the condition that,
1 [1996] 3 SLR 106.
2 Cap 20, 1996 Ed. The Act came into force on 15 July 1995.
3 See s 125 of the Act. A period of 5 years must have lapsed since the commencement of
bankruptcy (ie, the date of the bankruptcy order: see s 75 of the Act) and the provable debts
of the bankrupt must not exceed $100,000.
4 See s 126 of the Act.
5 S 126(6)(c) of the Act. The Court may also dismiss the application or order that no certificate
of discharge be granted by the Official Assignee for a period not exceeding two years: s
126(6)(a), (b).
6 He was made bankrupt under the repealed Bankruptcy Act but, pursuant to the transitional
provisions in s 167(3) and para 1(1) of the First Schedule, the present Act applied to him
as if he had become a bankrupt thereunder.
568 Singapore Journal of Legal Studies [1996]
upon sale or transfer of the flat, Ng must use his share of the sale proceeds
to satisfy the debt owed to HDB. Lai Siu Chiu J allowed the Official
Assignee’s appeal and allowed the grant of an unconditional certificate of
discharge.

The General Approach

The Official Assignee made the somewhat bold submission that he had
an absolute and unfettered discretion to issue a certificate of discharge and
that the Court ought not to intervene in the exercise of such discretion except
for very good reasons. This was apparently rejected by the learned Judge
who pointed out that section 126 of the Act ‘does not contain qualifying
words to the effect that the Court can interfere with the OA’s decision only
if the decision is reasonable’.7
The position taken by the learned Judge was clearly correct. It is true
that if a bankrupt or any of his creditors apply to the Court against an act,
omission or decision of the Official Assignee in relation to the
administration of the bankrupt’s estate,8 the Court will not intervene unless
there was bad faith or absurdity,9 or if the Official Assignee did not address
the correct question or made errors of law or failed to take into account
relevant matters or took into account irrelevant matters.10 For if the Official
Assignee has to answer at every step for the exercise of his discretion,
administration of the bankruptcy would be impossible.11 However, the context
is entirely different when the Official Assignee is considering whether to
grant a discharge. It is the exercise of a power which is determinative of
the creditors’ substantive rights and is probably more akin in nature to a
quasi-judicial act, such as a decision to reject a proof of debt, than an
administrative decision as to the conduct of the bankruptcy. In examining
the validity of a proof,12 the Official Assignee acts in a quasi-judicial capacity
in accordance with standards no less than the standards of a Court or Judge.13
7 Supra, note 1, at 119C.
8 S 31(1) of the Act.
9 Re Peters, ex parte Lloyd (1882) 47 LT 64 at 65; Re a Debtor [1949] Ch 236 at 241; Re
Hall (1957) 20 ABC 21 at 29; Re Carson (1960) 19 ABC 108 at 121; Stone v Angus [1994]
2 NZLR 202 at 204-5.
10 See, in the context of applications against an act, omission or decision of a liquidator under
the materially similar provision in s 315 of the Companies Act (Cap 50, 1994 Ed), Re Equity
Funds Of Australia (1976) 2 ACLR 238.
11 See Re a Debtor, supra, note 9, at 241; Re Carson, supra, note 9, at 121; Re Valibhoy [1995] 1
SLR 601 at 614.
12 See r 197(1) of the Bankruptcy Rules.
13 See, in the context of a liquidator’s duty in examining a proof under the similar r 92 of
the Companies (Winding Up) Rules, Tanning Research Laboratories Inc v O’Brien (1990)
169 CLR 332 at 338-9; Re Magic Aust Pty Ltd (1992) 7 ACSR 742 at 745.
SJLS Comments 601
SJLS Comments 569
Consequently, an appeal to the Court against the Official Assignee’s
decision to reject a proof14 probably takes the form of a de novo hearing.15
It is therefore suggested that the Court, in hearing an application against
the Official Assignee’s decision to issue a certificate of discharge, may
similarly consider all the circumstances in coming to a decision. Of course,
at the same time the Court should have due regard to the views of the
Official Assignee in relation to aspects such as the conduct and attitude
of the bankrupt during the bankruptcy and his suitability to recommence
trading.

Factors Relevant to Grant of a Discharge

The learned Judge very helpfully set out some pertinent factors which the
Court may consider in balancing the interests of the bankrupt with those
of his creditors to determine whether the bankrupt should be discharged
and, if so, whether conditionally or unconditionally. These were the cause
of the bankruptcy, the bankrupt’s conduct relevant to his bankruptcy as
well as after his bankruptcy, the interests of the public and commercial
morality.16 While this list of factors was probably not intended to be exhaustive,
it is noteworthy that none of the listed concerns had any direct bearing
on the interests of the bankrupt’s creditors. This commentator would
respectfully suggest that considerations such as the extent to which the
bankrupt’s creditors have been paid off and the total amount of debt still
outstanding would have deserved a place on the list. It may be inferred
from the overall purposes attaching to the bankruptcy law that the Court
should be mindful of the question whether the creditors have been enabled
to recover all that might reasonably be made forthcoming to them through
the bankruptcy.17 In this connection, it may be useful to note that, in the
case of a discharge by the Court, the Court is less likely to make an order
of discharge if it is shown that the bankrupt’s assets are worth less than
20% of the amount of his unsecured liabilities, unless this deficiency arises
from circumstances for which he cannot be held blamable.18 After 6 years
14 R 198(1) of the Bankruptcy Rules.
15 See, in the context of liquidation, Re Kentwood Constructions Ltd [1960] 1 WLR 646; Re
Trepca Mines Ltd [1960] 1 WLR 1273; Tanning Research Laboratories Inc v O’Brien, supra,
note 13, at 340-1. See also Watta Battery Industries Sdn Bhd v Uni-Batt Manufacturing
Sdn Bhd [1993] 1 MLJ 149 at 159. The right of appeal in liquidation is given by r 93 of
the Companies (Winding Up) Rules which is substantially similar to r 198(1) of the
Bankruptcy Rules.
16 Supra, note 1, at 118H.
17 Fletcher, The Law of Insolvency (Second Ed, 1996) at 313.
18 S 124(4) read with s 124(5)(j) of the Act.
602 Singapore Journal of Legal Studies [1996]
570 Singapore Journal of Legal Studies [1996]
of bankruptcy Ng had paid only $5,800 of HDB’s judgment debt of
$75,818.88; on average this worked out to a monthly payment of approximately
$80. Surely this fact warranted at least an express reference by the
Court in exercising its discretion though, of course, it would still have been
perfectly entitled, after consideration of all the circumstances of the case,
to conclude that Ng ought to be discharged.
An argument was made by HDB that the fact that Ng’s bankruptcy was
due to business failure rather than fraudulent or criminal acts was relevant.
This contention was rightly rejected by Lai Siu Chiu J, as it is difficult
to see in what way it assisted HDB’s case against an unconditional discharge.
However, the Court’s rejection of the argument may have been couched
in overly extensive terms; the learned Judge held that the fact that the cause
of bankruptcy was business failure and not fraudulent or criminal acts should
not make any difference to the way the Official Assignee ought to exercise
his discretion in issuing a certificate of discharge.19 Surely, whether the
bankrupt has engaged in fraudulent or criminal acts leading to his bankruptcy
has at least some measure of relevance to the factors for discharge, in
particular, his suitability to recommence business20 and the protection of
the public and commercial morality. More importantly, section 124(4) and
(5) of the Act explicitly places a higher burden on a bankrupt seeking a
discharge from the Court where, inter alia, he has committed an offence
under the Act or under sections 421, 422, 423 or 424 of the Penal Code,21
or where he has been guilty of any fraud or fraudulent breach of trust.22
While these provisions relate to the case of a discharge by the Court, they
should apply equally to the exercise of the Official Assignee’s discretion
in respect of a certificate of discharge.

The Main Issue

The issue which preoccupied the Court was the condition on the certificate
of discharge. It was not disputed that conditions should not be imposed
on a certificate of discharge such that the bankrupt could not improve his
position in life or make a fresh start.23 What was in dispute was the specific
issue of whether, in the light of section 51 of the Housing and Development
19 Supra, note 1, at 116F-G.
20 See Re Cook (1889) 6 Morr 224 at 233; Morgan v White (1912) 15 CLR 1 at 15-6. See
also Re Kolomy (1982) 56 FLR 157 and the authorities discussed therein.
21 Cap 224. These sections deal with dishonest or fraudulent acts committed for the purpose
of putting one’s assets beyond the reach of creditors.
22 See s 124(4) and s 124(5)(h) of the Act.
23 On this, see also Re James (1891) 8 Morr 19.
SJLS Comments 603
SJLS Comments 571
Board Act24 (‘HDB Act’), a condition could be imposed that, in the event
that Ng’s HDB flat is sold or transferred, the proceeds should be made
available to his creditors. The relevant part of section 51 provides that an
HDB flat shall not vest in the Official Assignee on the bankruptcy of the
owner and shall not be attached in execution of a decree of a Court.
Lai Siu Chiu J gave two reasons for her view that the condition could
not be sustained.25 Firstly, since Ng’s flat was protected from attachment
in execution of a decree of a Court, the condition was tantamount to HDB
circumventing the HDB Act and attempting to obtain indirectly what it could
not obtain directly. Secondly, section 78(2)(d) of the Act provides that a
bankrupt’s property which is excluded under any written law shall not
comprise property which is divisible among the bankrupt’s creditors. Read
with section 51 of the HDB Act, this established a ‘hands-off’ principle
on creditors in respect of a debtor’s HDB flat, whether the debtor was in
bankruptcy or being discharged from bankruptcy.
Neither of these reasons are without difficulty. The premise upon which
both reasons were founded was that the proceeds resulting from a sale or
transfer of Ng’s flat were not to be distinguished from the flat itself. This
is doubtful. On a reading of the relevant statutory provisions, it is not
apparent that the privilege of immunity from attachment in respect of an
HDB flat extends to the proceeds upon its sale or transfer. Indeed, it may
plausibly be argued that the basis for the immunity is that, since HDB flats
are publicly-subsidised and meet a most basic social need,26 it would be
unfair to society as a whole and harsh to the flat-owner if an HDB flat
were to be made available to satisfy his creditors’ claims. If so, there is
no justification for extending the immunity to the proceeds received upon
the sale or transfer of an HDB flat. Further, what if a bankrupt sells his
HDB flat while he is still bankrupt? Upon the learned Judge’s analysis,
the result would be that the bankrupt will be fully entitled to use the proceeds
as he wishes, and what appears to be a most unlikely and ill-advised thing
for a bankrupt to do takes on a wholly different flavour. This hardly seems
equitable; surely the proceeds of such a sale should be divisible among
his creditors. The case should fall squarely within the terms of section
78(1)(a) of the Act which provides that the property of a bankrupt which
24 Cap 129.
25 See supra, note 1, at 119H-120A.
26 Similarly, the Central Provident Fund fulfils a fundamental social necessity and an employee’s
Central Provident Fund moneys and contributions are rendered immune from attachment
and vesting in the Official Assignee upon bankruptcy: see s 25, Central Provident Fund
Act (Cap 36, 1991 Ed). See also s 31 of the Post Office Saving Bank of Singapore Act
(Cap 237).
604 Singapore Journal of Legal Studies [1996]
572 Singapore Journal of Legal Studies [1996]
is divisible among his creditors includes all property which is acquired by
him before his discharge.
On the other hand, when one considers the possibility of compulsory
acquisition, with which the learned Judge was understandably concerned,
her Honour’s approach has its merits. If Ng’s flat was subsequently
compulsorily acquired by the government for which he receives compensation,
it would be repugnant if he had to surrender the compensation moneys
to his creditors pursuant to the condition on the certificate of discharge.27
Though such a contingency could have been adequately met, on the facts
of Ng’s case, by an appropriate variation of the terms of the condition,
a more problematic issue arises if an HDB flat is compulsorily acquired
while the flat-owner is in bankruptcy. The effect of the relevant statutory
provisions, as argued above, would be that the compensation moneys paid
to the bankrupt would become divisible among his creditors. This would
be seriously prejudicial to the bankrupt since he would have been forcibly
deprived of his statutory immunity against attachment of his HDB flat.
Although this point was not discussed by the learned Judge, her Honour
may well have been influenced by this consideration in concluding that
the proceeds upon the sale or transfer of an HDB flat could not be divided
among the flat-owner’s creditors. However, on balance, it is submitted with
respect that it would been more logical and more faithful to the statutory
provisions to hold to the contrary. The problems connected with the
compulsory acquisition of a bankrupt’s HDB flat should be left to be
addressed by legislative remedial action.
A further point may be made with reference to her Honour’s reliance
on the statutory immunity of an HDB flat from attachment in execution
of a decree of a Court pursuant to section 51 of the HDB Act and her
view that the condition on the certificate of discharge constituted an
outflanking of such immunity. It is unfortunate that the recent decision
of the Court of Appeal in Central Provident Fund Board v Lau Eng Mui28
was not highlighted in connection therewith. In Lau Eng Mui the Court
of Appeal considered section 25(1) of the Central Provident Fund Act29
(‘CPF Act’), the material part of which provides that moneys in a CPF
account shall not be ‘liable to be attached, sequestered or levied upon for
in respect of any debt or claim whatsoever’. The question was whether
27 Supra, note 1, at 116C-F. Her Honour also felt that the same point may be made, to a lesser
degree, with respect to the possibility of en-bloc upgrading of Ng’s flat: he should not be
‘penalised’ for the increase in the value of the flat resulting therefrom when he sells. With
the greatest respect, this writer does not see the injustice.
28 [1995] 3 SLR 109.
the Court, in exercising its power under section 106 of the Women’s Charter30
to order the division of matrimonial assets when granting a decree of divorce,
judicial separation or nullity of marriage, could order that the wife’s share
of the matrimonial assets be satisfied from a portion of the husband’s CPF
moneys. It was held that such a ‘proprietary order’ could be made despite
section 25(1) of the CPF Act as, inter alia, such an order did not amount
to an attachment, sequestration or levy on CPF moneys. Moreover, a
‘proprietary order’ could be made notwithstanding that it imposed a charge
on the CPF moneys; the embargo against enforcement did not prohibit the
creation of such a charge. The Court of Appeal also expressly followed
the decision in Re Sandrasagram31 that the vesting of a bankrupt’s
property in the Official Assignee upon bankruptcy was not an attachment,
sequestration or levy within the meaning of a materially identical provision
in respect of the Singapore Municipal Provident Fund.
Applying the reasoning of these cases, it would seem that the provision
in section 51(3) of the HDB Act that an HDB flat shall not be attached
in execution of a decree of a Court does not prevent it from vesting in
the Official Assignee upon the flat-owner’s bankruptcy. This is probably
why an express provision to the latter effect is found in section 51(2).32
A fortiori, section 51(3) should not have any bearing on the type of
conditions which are permissible to be imposed on a certificate of discharge;
it is thus not easy to see how the condition on the certificate of discharge
in Ng’s case operated to circumvent the operation of section 51(3).
Certainly, following Lau Eng Mui, the fact that the condition amounted
to a charge on Ng’s flat33 does not result in a contravention of section 51(3)
either in wording or spirit. Further, the claim of a creditor against his bankrupt
debtor clearly cannot be given any less precedence than the claim, as in
Lau Eng Mui, of one spouse against another in matrimonial proceedings.
Concluding Note
The ultimate question is, where did the justice of Ng’s case lie? Hopefully,
it has been demonstrated that there is no convincing legal or policy ground
for completely insulating the proceeds of sale of Ng’s HDB flat, if and
when he sells it, from the reaches of his creditor. As a matter of fairness,
it is difficult to see why Ng should reap the rewards of the appreciation
30 Cap 353.
31 [1935] MLJ 247. See also Re Hendricks [1936] MLJ 89 and Re Monteiro [1949] MLJ 185.
32 S 25(4) of the CPF Act is a similar express provision prohibiting the vesting of CPF moneys
in the Official Assignee upon the bankruptcy of a CPF member.
33 Lai Siu Chiu J appeared to lay some emphasis on this fact: see supra, note 1, at 116C.
606 Singapore Journal of Legal Studies [1996]
574 Singapore Journal of Legal Studies [1996]
in value of his HDB flat while his creditor remains unpaid. The HDB Act
guarantees an HDB flat-owner that he will never be forcibly evicted from
his home by his creditors; it should not assure him that he can realise and
enjoy the incidental capital gains without having to account for his debts.
On the other hand, the condition imposed by the Deputy Registrar was
oppressive to Ng in one respect: no time limit had been imposed with respect
to the operation of the condition. If Ng had not been made bankrupt, the
Limitation Act34 would have barred the enforcement of the HDB’s judgment
debt after 12 years;35 Ng would have been at liberty to sell his HDB flat
after this period had elapsed without fear of being compelled to surrender
the proceeds to satisfy the judgment debt. Surely, he cannot be put in a
worse position in his bankruptcy. The operation of the condition should
have been limited in time to a period of 12 years from the date of the
judgment, discounting the period of the bankruptcy itself.36 This course,
it is respectfully suggested, would have achieved the proper balance between
the respective interests of the parties.
LEE ENG BENG*
34 Cap 163.
35 S 6(3) of the Limitation Act.
36 Since time under the Limitation Act stops running upon the making of the bankruptcy order in respect of a
claim which is recoverable in the bankruptcy : see Re Westby (1879) 10ChD 776 at 784; Re Crosley (1887) ChD
266; Re Benzon [1914] 2 Ch 68 at 75; Cotterell v Price [1960] 3 All ER 315.

Procedure
READY FOR DISCHARGE
- Notice to all proven creditors by OA of intention to discharge and reasons
 Creditors have no objections of notice [NB: no reply within 21 days, deemed to have consented -
see s126(3) BA
 Objections are raised and filed within 21 days of notice
• Objections are accepted: No discharge
• Objections are rejected
 If OA rejects reasons for objection, creditor may apply to Court to prohibit OA from
issuing certificate
 OR Creditor does not proceed further
- The Court may impose conditions for discharge, If fulfilled:
- Dismiss application:
- Suspend discharge for two years
=> DISCHARGED BY CERTIFICATE

CONTENTS OF CREDITOR’S OBJECTION

- If no information is given by the objecting creditor except for a bare statement that he has not been paid,
his objection will in all likelihood be rejected
• because dividend most likely not paid
- The Official Assignee will not exercise his discretion to discharge if the objecting creditor provides the
Official Assignee with information pertaining to assets of the bankrupt or other relevant information
that enables the Official Assignee to administer the case further