LEE YIH KANG v HSU SHIH HSUN

Facts

Hsu Shih Hsun had obtained a Hong Kong judgment, later varied, against Infinity Capital Group Limited, whose sole director was Jonathan Cheng. Infinity did not pay. Lee Yih Kang then signed a deed dated 15 February 2025 under which he agreed to pay Hsu A$1.5 million in instalments, with the whole sum falling due on any default. The first instalment of A$100,000 was never paid, and Hsu's lawyers served a statutory demand for A$1,507,276.71 on Lee on 26 March 2025.

Lee applied in HC/OSB 35/2025 to set aside the statutory demand. An Assistant Registrar dismissed the application, and a judge of the General Division dismissed his appeal in HC/RA 128/2025. Lee appealed to the Appellate Division in Civil Appeal No 77 of 2025. He claimed he signed the deed under duress, because Hsu had threatened to circulate videos and posts accusing Jonathan of fraud, and that the deed had not been validly executed.

Issues

1. Whether Lee raised a triable issue that he signed the deed under duress
2. Whether Lee raised a triable issue that the deed was not validly executed, including for want of a witness or consideration
3. Whether the statutory demand ought to be set aside on any other ground under r 68(2)(e) of the Personal Insolvency Rules

Holding

The Appellate Division dismissed the appeal in its entirety, agreeing with the Judge that Lee had raised no triable issue, and fixed costs at $32,000 inclusive of disbursements, with the usual consequential orders.

Reasoning

On duress, the court applied the two elements of compulsion of the will and illegitimate pressure from Tam Tak Chuen v Khairul bin Abdul Rahman [2009] 2 SLR(R) 240. It accepted for the appeal that Lee had business dealings with Jonathan and wanted to protect his reputation. But the alleged threats concerned Jonathan, not Lee, and were not accompanied by any demand that Lee guarantee Infinity's debt. Lee himself first offered a guarantee at a drinking session on 19 January 2025. Hsu then cautioned him twice to think carefully before committing, and Lee replied that Hsu was thinking in his best interest. Hsu's lawyers told Lee he could seek independent advice, and he later asked for extensions of time to pay without claiming duress. A new argument of an implicit demand was contrary to the evidence. The court found that Lee's omission of these messages from his affidavit was deliberate, and in any event the evidence was overwhelmingly against him. Zhang Jinhua v Yip Zhao Lin [2024] 5 SLR 1046 was distinguished on its very different facts. The duress defence was hopeless.

On execution, Lee did not dispute signing the deed and returning it electronically. The law does not generally require an attesting witness for a contract to be valid, and nothing in the deed required one. Lack of consideration failed because the guarantee was a deed and, in any event, cl 1.3 stated that Hsu would withhold recovery action while the instalment scheme ran.

The discretion under r 68(2)(e) is exercised only rarely, and nothing in this case called for it.

From the judgment