Re Lim Keng Teck

Mr Lim Keng Teck was adjudged a bankrupt on 23 February 2023. In an earlier application, HC/SUM 1686/2023, he sought review of the Official Assignee's (OA) first determination of his monthly contribution (MC) and target contribution (TC). The court allowed that application and directed the OA to reassess, giving four reasons: the unstable and uncertain nature of his income, his status as an independent consultant, a condominium tenancy that could not be ended before 2 January 2025 without paying the full 24 months' rent, and the extent to which his spouse could contribute to family maintenance.

On 18 August 2023 the OA issued a second determination fixing the MC at $7,630 and the TC after 52 months at $396,760. Mr Lim applied under s 340 of the Insolvency, Restructuring and Dissolution Act 2018 (IRDA), in Bankruptcy No 206 of 2023 (Summons No 2771 of 2023), for review of that second determination. He said the OA had ignored those reasons and failed to explain itself or engage with him.

1. Whether the OA was obliged to give reasons in the notice of determination or to engage with the bankrupt
2. Whether the OA had considered the factors in s 339(2) of the IRDA
3. Whether the OA's determination withstood review under the perversity standard
4. Whether it was just and equitable for the court to vary the MC and TC to account for the tenancy

Applying the two-stage framework in Mirmohammadali Hadian v Ambika d/o Ramachandran (Official Assignee, non-party) [2023] SGHC 116, the court first held that the OA need not give reasons in the notice of determination. Only a trustee in bankruptcy, which the OA supervises, must explain its basis, and the OA has no duty to consult the bankrupt.

At the first stage, the OA need only briefly show that it considered the s 339(2) factors; it does not have to refer to every factor. A broad reading of the OA's explanation, which used headings matching the statutory factors, satisfied the court.

At the second stage, the court rejected the challenges on income and expenses. The court had made no finding that Mr Lim's income was unstable, and the OA found no imminent risk of job loss. Possible future loss of income could be addressed through an application under s 342(1). Its treatment of business expenses was not perverse. Nor was it perverse to make no deductible for the spouse, who earned $2,800 a month.

On the tenancy, the OA believed it had no power to order a step-up MC plan and so spread a limited rent deductible over the plan period. That was not perverse, but it did not reflect reality: Mr Lim was bound to pay a monthly rent of $4,800 now, and his spouse's income could not realistically cover half. Under s 341(2)(c) read with s 341(1), the court may vary the MC and TC where just and equitable, and the breadth of s 341(1) allowed a step-up plan. The court stressed that the order was not the norm, that the OA had done nothing particularly wrong, and that s 340(1) review is not an appeal on every detail of a determination.

Goh Yihan J allowed the application in part. Under s 341(1) of the IRDA the court raised the extraordinary deductible for rental expenses from $544.60 to $4,169.70 and revised the MC to $4,004.90 until 2 January 2025, when it would be reassessed. The court added directions that the rent contribution be reassessed if Mr Lim sought a reduction under s 342(1) before that date, and that he inform the OA of his new rental arrangements by 16 December 2024. Parties were given liberty to write in for clarifications.