Lau Yean Liang, Raymond v JASON ALEKSANDER KARDACHI & Anor

Facts

Fullerton Capital Ltd is a company incorporated, with its registered office, in the British Virgin Islands. Mr Lau Yean Liang Raymond was a director and shareholder from 2014 to 2018. The only business known to the court was a loan contract of around 10 August 2017 with Discovery Key Investments Ltd (DKI), which DKI later alleged in Suit 435 in Singapore was a fraudulent scheme involving Fullerton, Mr Lau and an employee.

While that suit was pending, Fullerton's board put the company into voluntary solvent liquidation on 28 March 2022, and it was dissolved on 20 April 2022. DKI had the dissolution declared void by the BVI High Court, which appointed new liquidators. They accepted DKI's discounted costs claim of US$67,303.29, found Fullerton unable to pay, and continued the liquidation as an insolvent one, funded by DKI as sole creditor. The liquidators, Mr Kardachi and Ms Hanrahan, applied in HC/OA 116/2024 for recognition of the BVI liquidation as a foreign main proceeding under the UNCITRAL Model Law as enacted in Singapore, and for disclosure and examination orders. A Judicial Commissioner granted both, including an order against Mr Lau subject to an undertaking not to pass relevant material to DKI without permission. Mr Lau appealed in Civil Appeal No 28 of 2024.

Issues

1. Whether Fullerton's centre of main interests was in the British Virgin Islands, and what burden and standard of proof apply to rebut the Art 16(3) presumption.
2. Whether bad faith or material non-disclosure by foreign representatives can engage the public policy exception in Art 6, and whether it was engaged here.
3. Whether the disclosure and examination order against Mr Lau should be set aside.

Holding

The Court of Appeal dismissed the appeal at the hearing on 20 January 2025 and later gave grounds. Fullerton's centre of main interests was in the BVI, the public policy exception was not engaged, and the disclosure and examination order stood. The application to adduce further evidence was also dismissed, and costs of $80,000 (all-in) were awarded to the liquidators.

Reasoning

The court held that Art 16(3) creates a true rebuttable presumption that the registered office is the centre of main interests and must be the starting point, not a tie-breaker. The party asserting another location bears the legal burden of proving, on the balance of probabilities, that a specific competing jurisdiction has the stronger connection. Showing a weak link with the registered office is not enough, because the concept is relative. The court declined to follow the US approach of an evidential burden only, departed from earlier High Court dicta in Re Zetta Jet Pte Ltd and others (Asia Aviation Holdings Pte Ltd, intervener) [2019] 4 SLR 1343, and stressed that courts must still examine the evidence in unopposed applications. It also held that a foreign representative's own activities may be weighed, and doubted that the focus should be on when the debtor was "alive and flourishing".

On the facts, little was known of Fullerton beyond one transaction. Mr Lau's attempt to treat Hong Kong and China together was misconceived, a former director's residence was too remote in time, DKI's base was unproven, and the transaction had links to England, Singapore and Canada. Control and direction lay with the BVI liquidators, so the presumption was not rebutted.

The court accepted that bad faith and material non-disclosure can engage the public policy exception as an abuse of the court's process, and that the relevant duty is the general duty not to mislead the court, which applies even where the application is contested. But there was no bad faith or non-disclosure. The restoration costs arose only from the improper dissolution designed to stymie Suit 435, creditor funding is common and legitimate, and the stay of Suit 435 and the funding were disclosed.

On the order, Mr Lau conceded the judge applied the right test. Oral examination and possible later claims are ordinary consequences of such orders, and as a former director he owed a statutory duty to assist the liquidators. Fullerton could have claims beyond Suit 435, and the undertaking his own counsel had proposed adequately addressed his concerns.

From the judgment