Re Zhong Jun Resources: Expunging Proof of Debt in Winding Up

The High Court of Singapore dismissed the liquidator's applications to expunge the proofs of debt filed by Inner Mongolia Huomei-Hongjun Aluminium Electricity Co Ltd and Shenzhen Huomei-Hongjun Aluminium Trading Co in the winding up of Zhong Jun Resources (S) Pte Ltd. The liquidator alleged the debts were fraudulent, but the court found the liquidator failed to prove on a balance of probabilities that the debts were invalid. The court ordered costs to be paid to each of Inner Mongolia and Shenzhen.

1. Case Overview

1.1 Court

General Division of the High Court

1.2 Outcome

Applications dismissed

1.3 Case Type

Insolvency

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Liquidator's applications to expunge proofs of debt by Inner Mongolia and Shenzhen were dismissed. The court found the liquidator failed to prove the debts were invalid.

1.7 Decision Date

25 June 2024

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Zhong Jun Resources (S) Pte Ltd (in liquidation)	Defendant	Corporation	Applications dismissed	Lost	Chng Zi Zhao Joel of Wong Partnership LLP Chia Shi Mei of Wong Partnership LLP Daniel Liu of Wong Partnership LLP Toh Yong Xiang of Wong Partnership LLP
Inner Mongolia Huomei-Hongjun Aluminium Electricity Co Ltd	Non-party	Corporation	Applications dismissed	Won	Koh Weijin Leon of M/s N S Kang Elsie Lim Yan of M/s N S Kang Chng He Han of M/s N S Kang
Shenzhen Huomei-Hongjun Aluminium Trading Co	Non-party	Corporation	Applications dismissed	Won	Jimmy Yap of Jimmy Yap & Co

3. Judges

Judge Name	Title	Delivered Judgment
Chua Lee Ming	Judge of the High Court	Yes

4. Counsels

Counsel Name	Organization
Chng Zi Zhao Joel	Wong Partnership LLP
Chia Shi Mei	Wong Partnership LLP
Daniel Liu	Wong Partnership LLP
Toh Yong Xiang	Wong Partnership LLP
Koh Weijin Leon	M/s N S Kang
Elsie Lim Yan	M/s N S Kang
Chng He Han	M/s N S Kang
Jimmy Yap	Jimmy Yap & Co

4. Facts

The Company was in the business of trading metals.
The Company entered into commodity financing arrangements with a number of banks, including HSBC.
HSBC applied to wind up the Company.
Inner Mongolia and Shenzhen filed proofs of debt.
The then liquidators of the Company partially admitted proofs of debt filed by Inner Mongolia and Shenzhen.
The current liquidator applied to expunge the proofs of debt that had been admitted.
The liquidator stated that he discovered several inconsistencies in the supporting documents provided by Inner Mongolia and Shenzhen.

5. Formal Citations

Re Zhong Jun Resources (S) Pte Ltd (in liquidation)(Inner Mongolia Huomei-Hongjun Aluminium Electricity Co Ltd and another, non-parties), Companies Winding Up No 127 of 2014 (Summonses Nos 2430 and 2432 of 2023), [2024] SGHC 160

6. Timeline

Date	Event
2004-06-28	Company incorporated
2014-07-01	HSBC applied to wind up the Company
2014-11-11	High Court ordered the Company to be wound up
2014-11-11	Inner Mongolia filed its proof of debt
2015-07-09	Shenzhen filed its proof of debt
2015-08-12	Inner Mongolia was informed that a sum of US$2,893,295 was admitted and the balance of US$760,014 was rejected
2015-08-12	Shenzhen was informed that a sum of US$15,033,882.15 was admitted and the balance of US$13,716,117.85 was rejected
2016-07-28	Chadwick was released as a joint and several liquidator of the Company and Mr Joshua Taylor was appointed in his stead
2020-07-30	IRDA came into force
2020-09-15	Taylor was released as a joint and several liquidator leaving Yit as the sole liquidator of the Company
2023-08-08	Liquidator filed SUM 2430 and SUM 2432
2024-03-04	First hearing
2024-05-06	I dismissed the liquidator’s applications
2024-06-26	Judgment Date

7. Legal Issues

Expunging proof of debt
- Outcome: The court dismissed the liquidator's applications to expunge the proofs of debt.
- Category: Procedural
Proof of debt owed by related company
- Outcome: The court found that the liquidator failed to prove that the debts were invalid.
- Category: Substantive

8. Remedies Sought

Expungement of proofs of debt

9. Cause of Actions

No cause of actions

10. Practice Areas

Corporate Restructuring
Commercial Litigation

11. Industries

Commodities Trading

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Fustar Chemicals Ltd (Hong Kong) v Liquidator of Fustar Chemicals Pte Ltd	Court of Appeal	Yes	[2009] 4 SLR(R) 458	Singapore	Cited for the principle that a creditor challenging a liquidator’s rejection of its proof of debt had to prove the debt on a balance of probabilities.

13. Applicable Rules

Rule Name
Rule 133(1) of the Insolvency, Restructuring and Dissolution (Corporate Insolvency and Restructuring) Rules 2020

14. Applicable Statutes

Statute Name	Jurisdiction
Section 220 of the Insolvency, Restructuring and Dissolution Act 2018	Singapore
Companies Act (Cap 50, 2006 Rev Ed)	Singapore
Companies Act 1967	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Proof of debt
Liquidator
Winding up
Expunge
Balance of probabilities
Fraudulent

15.2 Keywords

Insolvency
Winding up
Proof of debt
Expungement
Liquidator

17. Areas of Law

Area Name	Relevance Score
Winding Up	95
Insolvency Law	90
Liquidator	80
Proof of Debt	75
Evidence Law	60

16. Subjects

Insolvency
Corporate Law