Lau Yu Man v Wellmix Organics (International) Pte Ltd

[1] This is a continuation of a long running saga between the plaintiff (“Lau”) and, nominally, the defendant company. In actual fact, the plaintiff’s quarrel is with the persons calling the shots in the company, the general manager Wong Yiat Hong Raymond (“Wong”) and the majority shareholder, Lai Shit Har (“Lai”) who is Wong’s mother.

[2] I had outlined the background to this matter in my decision in Lau Yu Man v Wellmix Organics (International) Pte Ltd [2007] SGHC 96 dated 20 June 2007 and refer to my narration of the facts there. In the three concluding paragraphs at [10], [11] and [12], I had stated as follows:

[3] The above order was made on 5 February 2007, in effect giving the company four months to rectify matters. Five months later, on 4 July 2007, the company filed Summons No 2865 of 2007 praying for the following orders:

[4] From the affidavit filed by Wong in support of this application, it would appear that even five months after I had exercised my discretion in his favour, he had not managed to rectify matters. Wong said that he had tried his best to ensure compliance with the court order but encountered a lot of difficulties. The documents required for the purposes of the auditing process were extensive and numerous. Almost two months were spent gathering and verifying such documents, which were contained in more than 80 arch lever files. Throughout this period he only had the assistance of a part-timer as this was all he could afford. Around March 2007 the original auditor of the company, Robert Tan & Company told him that it was facing a shortage of manpower and would not be able to complete the audit within the deadline. However Wong exhibited a letter of resignation from the auditor dated 12 June 2007. It is surprising that the auditor took some three months to write this letter. It is also surprising that Robert Tan & Company resigned as auditor a week after the deadline of 5 June 2007.

[5] Be that as it may, I move on to what Wong said he did about the situation. He said that between March and June 2007 he tried to get another auditor. One such firm he approached was Baker Tilly TFWLCL (“Baker”). However the period was also the peak period for most auditing firms because of tax and audit deadlines in June and July. Wong said that Baker declined at the outset because they were not confident that they could complete the audit by 5 June 2007. Wong also added that because “the Company was financially constrained, I had to spend a considerable amount of time to look for firms that offered an affordable price”.

[6] After a long search, Wong managed to instruct, with great persuasion, the firm of Wong Sook Yee & Company. He exhibited a letter from that firm dated 29 June 2007 explaining the difficulties involved and why an extension of time was needed. The letter stated that they would require up to the end of September 2007 to complete the audit.

[7] I was not satisfied that Wong had diligently gone about complying with the indulgence that I had granted to him on 5 February 2007. Further he had admitted in his affidavit that he had some difficulty with funds to comply with the order. It had not entirely escaped my notice that the application for extension of time was filed only on 4 July 2007, one month after the 4 June 2007 deadline. I should point out that on 5 February 2007 when the issue before me was whether I should exercise my discretion in favour of the company, it was counsel for the company who proposed a four-month period for the company to rectify matters. I did not reduce it at all. As I have stated in the concluding paragraph of my grounds of decision of 20 June 2007, this has been a difficult case and a finely balanced matter. On 5 February 2007 it seemed to me that it would tilt in the company’s favour if I gave it four months to comply. In the circumstances that obtained on 16 July 2007, particularly in view of the fact that Wong had been given his chance and not only was he unable to seize it, I was not convinced that he made much effort to do so. In the circumstances I was of the view that the best course of action would be to order the winding up of the company rather than delay it any further. Accordingly I refused the company’s application in the summons. I subsequently adjourned the hearing to open court and ordered the company to be wound up under s 254(1)(c) of the Companies Act (Cap 50, 2006 Rev Ed).