CHIA KOK KEE v TAN WAH

1 Mdm Tan Wah (“Mdm Tan”), the respondent, and Mr Chia Kok Kee (“Mr Chia”), the appellant, are shareholders of HX Investment Pte Ltd (“HX”). In May 1995, Mr Chia and Mdm Tan agreed to invest in a joint venture in a hydro-electric power plant in the People’s Republic of China (“PRC”). The joint venture was held by a PRC-incorporated company called Sichuan New Dujiang Electrical Power Co. Ltd (“SND”). On 14 June 1995, HX was incorporated to invest in SND. HX invested RMB6,225,369, equivalent to 25% of the share capital in SND (the “Investment”).

2 Subsequently, disputes arose between Mr Chia and Mdm Tan, resulting in a litany of legal proceedings by Mr Chia. Mr Chia commenced HC/S 97/2011 (“S 97”) alleging fraud against Mdm Tan in omitting to record his investment contribution and further alleging that HX’s auditor and Mdm Tan’s solicitor were in collusion in the fraud. An Assistant Registrar (“AR”) struck out S 97. The High Court dismissed Mr Chia’s appeal against the AR’s decision: see Chia Kok Kee v Tan Wah and others [2012] 2 SLR 352. Mr Chia filed CA/CA 158/2011 (“CA 158”) to appeal against the striking out of S 97. The Court of Appeal allowed the appeal only to a limited extent, and Mr Chia was ordered to pay the costs of the appeal. Subsequently, the Court of Appeal in CA 158 made the following orders (among others): (a) any sale of the Investment had to be agreed to by all the shareholders of HX; and (b) there be a global stay on all payment obligations and costs orders between the parties except for an order for Mdm Tan to pay Mdm So RMB684,024.59 (the “global stay order”).

3 On 16 April 2018, another investor of SND, State Grid Sichuan Dujiangyan Electric Power Supply Company Limited (“SGSDEPS”), filed a bankruptcy application in the PRC against SND. In the course of the bankruptcy proceedings, a restructuring plan for SND was proposed, under which a new investor, a PRC company, Sichuan Tongda Railway Engineering Co Ltd (“Tongda”), would pay off all the debts of SND in the sum of RMB7.5m and, in return, it would acquire all the equity of SND.

4 On 6 September 2021, the restructuring plan was approved at a creditors’ meeting (the “Creditors’ Meeting”). On 10 September 2021, the restructuring plan was approved by the People’s Court of Dujiangyan City, Sichuan Province, PRC, pursuant to which the Investment was disposed of. Thereafter, Mdm Tan applied in CA/SUM 25/2023 (“SUM 25”) to lift the global stay order made in CA 158. The Court of Appeal allowed this application on 6 November 2023.

5 On 7 December 2023, Mr Chia received a statutory demand from Mdm Tan for the sum of $886,275.69 (the “statutory demand”) which comprised various costs payable by Mr Chia, a certain sum for underpayment of Mdm Tan’s share of dividends paid by SND and interest. On 19 December 2023, Mr Chia filed HC/OSB 108/2023 (“OSB 108”) to set aside the statutory demand. The application was dismissed by an AR and, on 15 February 2024, Mr Chia filed an appeal against the AR’s decision in HC/RA 33/2024 (“RA 33”). The appeal was heard by a judge of the General Division of the High Court (the “Judge”).

6 Before the Judge, Mr Chia submitted that he had a cross claim against Mdm Tan and that the damages exceeded the amount claimed in the statutory demand. Mr Chia’s case was that Mdm Tan had sold the Investment without his agreement and that Mdm Tan was therefore liable to him for his share of the value of the Investment. According to Mr Chia, his stake in the Investment had been stolen by collusion between Mdm Tan and “the Chinese parties”, including the liquidation manager of SND, Ms Xu Yi (“Ms Xu”), SGSDEPS and/or Tongda. He also claimed that he had lodged a complaint to the Central Commission for Discipline Inspection of the Communist Party (“CCDI”) against the judge in the People’s Court of Dujiangyan who approved the restructuring plan, Ms Xu and SGSDEPS’s legal representative for their roles in the bankruptcy of SND, which ultimately led to the illegal disposal of the Investment.

7 The Judge dismissed Mr Chia’s appeal in RA 33 as his cross claim did not raise any triable issues under r 68(2)(a) of the Insolvency, Restructuring and Dissolution (Personal Insolvency) Rules 2020. There were no triable issues in respect of: (a) whether Mdm Tan had sold the Investment without Mr Chia’s (and Mdm So’s) agreement; and (b) whether the Investment was worth RMB21m. Mr Chia filed AD/CA 58/2024 (“AD 58”) to appeal against the whole of the Judge’s decision.

8 Mr Chia’s cross claim did not raise any triable issues. The court dismissed the appeal: at [28], [37]–[38].

9 After the creditors’ meeting on 6 September 2021, Mr Chia wrote a letter to Mdm Tan dated 16 November 2021 (the “16 November Letter”), in which he sought Mdm Tan’s agreement to re-open a suit against SGSDEPS pertaining to its allegedly fraudulent bankruptcy application, and to work together to safeguard the Investment. Notably, the 16 November Letter was silent on the issue of Mdm Tan having disposed of the Investment without the consent of Mr Chia and Mdm Tan receiving compensation in exchange for the Investment. On Mr Chia’s own case, Ms Xu informed him of this fact in November 2021 but, although he was suspicious of Mdm Tan when he wrote the 16 November Letter, he kept silent. However, it was implausible that Mr Chia would keep mum about this revelation. It would also beggar belief for Mr Chia to think that Mdm Tan would work with him to “scuttle” the restructuring plan, as she was a beneficiary of this alleged scheme: at [29]–[30].

10 Mr Chia’s failure to mention the alleged collusion involving Mdm Tan in SUM 25 buttressed the point that his cross claim was a mere afterthought. The Court of Appeal had granted Mdm Tan’s application in SUM 25 to lift the global stay order on the basis that the Investment had been disposed of pursuant to the approved restructuring plan. If Mr Chia was of the opinion that he had been “played out” by Mdm Tan and had not received his share of the sale proceeds of the Investment, he ought to have raised these grievances as a basis for objecting to SUM 25. After all, the global stay order was “intended to facilitate the resolution of the long-standing dispute between the parties”, which the Court of Appeal considered could be “resolved by the sale of the [Investment] held by [HX] in [SND]”: at [31].

11 Throughout the proceedings, Mr Chia failed to paint a consistent picture of Mdm Tan’s alleged wrongdoing. For instance, it was only at the appeal before the Judge that Mr Chia suggested for the first time that Mdm Tan had been colluding with SGDPS and/or Ms Xu to defraud him of his stake in SND. This allegation came too little, too late. In the proceedings before the Judge, Mr Chia also provided an inconsistent account of his case. Mr Chia initially claimed that he had correspondence from the parties in the PRC confirming that RMB6.25m had been paid to Mdm Tan. However, at a subsequent hearing, his counsel confirmed that there was no such correspondence: at [32]–[33].

12 Mr Chia’s criticisms of the minutes of the Creditors’ Meeting were unfounded. In any event, even if Mr Chia’s translation of the minutes was accurate, his translation did not suggest that Tongda necessarily acquired all the shares in SND for value. There was also insufficient evidence that part of the minutes was fabricated by Mdm Tan, Ms Xu and/or the “other Chinese parties”: at [34]–[35].

13 Mr Chia’s alleged complaint to the CCDI failed to show that his cross claim was not belated. Mr Chia did not produce any document relating to the alleged CCDI investigation. He conceded that he did not file a complaint against Mdm Tan. Mr Chia’s claim that he named Mdm Tan in the contents of his complaint appeared contrived and was only brought up for the first time in AD 58: at [36].

14 Indemnity costs were warranted in this case as the appeal was entirely unmeritorious, causing Mdm Tan to incur additional costs. Mr Chia’s cross claim was irreconcilable with the contemporaneous documents and his prior conduct. It was an afterthought designed to frustrate the due process of the bankruptcy proceedings against him: at [38].