A Singapore Government Agency Website. You do not need a lawyer. In the affidavit filed in support of the application, the debtor must: Directors will temporarily be relieved from their obligations to prevent their companies from trading while insolvent if the debts are incurred in the company’s ordinary course of business, during the prescribed period and before the appointment of a judicial manager or liquidator of the company. On 20 April 2020, the government passed a new law to provide temporary relief to debtors from creditors for up to 6 months from 20 April 2020. If any counterparty to a Scheduled Contract disputes that the non-performance of the Scheduled Contract was to a material extent caused by a COVID-19 event, such disagreement can be referred to an “assessor” appointed by the Minister for Law. Any hearing conducted from April 7, 2020 to May 4, 2020 will be conducted through electronic means unless otherwise directed by Court. Is a Letter of Demand the same as a Statutory Demand? You can make a statutory demand to ask for payment of a debt from an individual or company. Singapore |  A Scheduled Contract entered into before March 25, 2020 but which automatically renews in accordance with its terms would be considered a Scheduled Contract entered into before March 25, 2020 notwithstanding it is automatically renewed after March 25, 2020. Contracting parties should be prepared to start performing those contractual obligations at the end of the prescribed period unless a separate agreement has been made for an alternative arrangement before the end of the prescribed period. Upon receipt of a notification for relief, the recipient of such notification cannot take any prohibited action mentioned above. Debtor who has been served with a Statutory Demand may: (a) within 14 days; or (b) where the demand was served outside jurisd­iction, within 21 days, from the date on which the demand is served apply to court by way of Origin­ating Summons for an order setting aside the Statutory Demand Section 62 BA Debtor is presumed unable to pay debt if: It is significant to note that a statutory demand is technically not a court proceeding and should be permitted. The COVID-19 Act also provides for Scheduled Contracts to extend to individual contracts where the Government is a counterparty. In cases where the statutory demand is served on the debtors on or after 20 April 2020, the statutory period for debtors to respond to the demands is extended from 21 days to 6 … The monetary threshold for insolvency for businesses will be increased ten-fold, from SGD 10,000 to SGD 100,000. When will the hearing of the application to set aside the Statutory Demand be held? MAS has thus recommended that SMEs take into account any late charges and higher interest, and the possibility that they may end up paying more in the future. December 2, 2020. The process of debt recovery is unique to each situation and our lawyers will be able to advise you on the appropriate steps as part of your initial consultation. Only the following types of contracts set out in the schedule to the COVID-19 Act (the Scheduled Contracts) may be subject to relief as part of the Temporary Measures: a) Leases or licenses of non-residential immovable property, c) Performance bonds or equivalent granted pursuant to a construction or supply contract, d) Contracts relating to the provision of goods and services for events, e) Contracts relating to the provision of goods and services relating to tourism, f) Certain secured loan facilities provided by financial institutions to qualifying small and medium enterprises (being businesses in Singapore where not less than 30 per cent of its shares or other ownership interest are held by citizens and/or permanent residents of Singapore and the turnover of the group to which it belongs is not more than $100 million in the latest financial year) (SMEs), g) Certain hire purchase agreements relating to plants, machineries or fixed assets located in Singapore which are used for manufacturing, production or other business purposes, or commercial vehicles. If the application to set aside the Statutory Demand is dismissed by the … Singapore. A guide to statutory demands in the context of personal and corporate insolvency. The statutory demand is one of the most frequently used (and misused) tools utilized by companies and other persons to obtain payment of debts owed… Toggle navigation Search A “Black Swan Event” requires a “Black Swan Act”. However, any prohibited action cannot be taken against the contracting party till after the end of the prescribed period. In summary, for a contractual breach to enjoy the benefits of the Temporary Measures: If all of the above are true, a notice of relief may be served on the counterparty to that contract. Anyone who’s owed money (the ‘creditor’) can make a statutory demand. The Monetary Authority of Singapore (MAS) has also clarified that a bank’s contractual rights to charge interest including default interest would not be affected during the prescribed period. For individuals, the monetary threshold for bankruptcy will be increased from SGD 15,000 to SGD 60,000. ! This means that at the end of the prescribed period, unless separate arrangements have been made, the contracting party will be liable for all accrued liabilities. * Before filing a Bankruptcy Application, a creditor will issue a notice known as a Statutory Demand, demanding payment from a debtor. The prescribed period will commence on a date to be set out in the Government Gazette. Following unsatisfied demands for repayment, Rangecroft issued an originating application to appoint liquidators over Lenox in March 2020. Social distancing measures apply to court proceedings as well. However, Directors remain criminally liable if the debts are incurred fraudulently. Service of Statutory Demands and Creditor’s Bankruptcy Applications – Is the Time Ripe for an Amendment to the Statutory Regime? The hearing of the application will usually be held within two weeks from the date of filing the application. The issuer will also be prohibited from carrying out any of the above actions following such statutory demand during the prescribed period. Following the publication by Institutional Shareholder Services (ISS) of its updated guidelines earlier this month, Glass Lewis (GL) has updated its Canadian proxy voting guidelines for the 2021 proxy season. In accordance with well-established and judicially endorsed practice, Rangecroft chose not to serve a statutory demand prior to issuing the liquidation application. However, unlike meetings, in order to ensure cases are conducted fairly, not all court proceedings will be conducted remotely. Publication |  If a debtor wishes to set aside the Statutory Demand served on him, an application to set aside the Statutory Demand must be filed within 14 days (or if the Statutory Demand was served outside Singapore, within 21 days) from the date of service of the Statutory Demand. However, they remain criminally liable if the debts are incurred fraudulently. The Act aims to provide temporary relief to debtors from creditors’ legal action for up to 6 months from 20 April 2020. The document should have the title "Creditor's Statutory Demand for Payment of Debt" on the heading of the front page. If such alternative meeting arrangements are complied with since March 27, 2020, they will be deemed complied with for the purposes of the main legal requirements. #��a�Y����d��j A Cease and Desist will also generally assert that the sender would take legal action if the acts alleged of continue beyond the deadline set. The Singapore government has introduced the COVID-19 (Temporary Measures) Act 2020 (the COVID-19 Act) with the objective of: These temporary measures (the Temporary Measures) are initially intended to last for six months (the prescribed period) and may be extended for up to 12 months. Welcome to Singapore Statutes Online This Singapore Government website provides free online access to Singapore’s legislation. Please click here to report errors in legislation reproduced on SSO. The COVID-19 Act comes at an appropriate time when businesses in Singapore are struggling to make ends meet, from cash flow to keeping staff. We offer fast and effect statutory demand advice, whatever your situation. The following actions are prohibited against the counterparties to the Scheduled Contracts (and in the case of paragraphs (a) to (d), their guarantor): a) Commencement or continuation of any court or arbitration proceedings, b) Court and insolvency proceedings (including applications for bankruptcy, winding up, judicial management and schemes of arrangement) and enforcement of judgments and domestic arbitrations, c) Commencement or levying of execution, distress or other legal process, e) Enforcement of security over immovable property and movable property used for the purpose of a trade, business or profession, f) Repossession of any goods used for the purpose of a trade, business or profession under any chattels leasing agreement, hire-purchase agreement or retention of title agreement, g) Termination of leases or licences of immovable property in connection with non-payment of rent or other moneys, h) Exercise of a right of re-entry or forfeiture under a lease or licence of immovable property or any other right with a similar outcome. But regardless of whether it was you or the creditor who filed the bankruptcy application, the Bankruptcy Order will be made to you, by the High Court, if the application succeeds. Such matters include certain criminal matters, applications for urgent injunctions, applications for the arrest or release of a vessel, applications under the Building and Construction Security of Payment Act and requests for urgent hearings for matters assessed to be urgent. 426 0 obj <> endobj Was the Scheduled Contract executed before March 25, 2020 with obligations to be performed on or after February 1, 2020? endstream endobj December 2, 2020. Any prohibited action that has  already commenced will also be stayed. In this regard, SMEs should engage their banks to explore options made available by the individual banks (if any) for example, deferment of principal repayment with a waiver of late charges. However some contracts may be renewed only after a determination is made notwithstanding that determination may, in the ordinary course of business, be merely administrative. Subscribe and stay up to date with the latest legal news, information and events... We use cookies to deliver our online services. Where relevant to the Singapore context, the blog also discusses legal news from other parts of the world, particularly the Commonwealth jurisdictions. Where a Statutory Demand is served on an individual after the commencement of the Act and during the prescribed period, the debt would have to be for at least $60,000 and would have to remain unsatisfied for at least 6 months after the Statutory Demand is served. April 2020. Scheduled Contracts (as currently defined) in relation to secured loan facilities will only include contracts with a bank licensed under the Banking Act or a finance company licensed under the Finance Companies Act as a counterparty. The form of a valid statutory demand is provided for in the Bankruptcy Rules, which also lists out a … This would include contracts entered into with URA, JTC and HDB as counterparties. In which case how far back does one go? The period for a debtor to satisfy a creditor's statutory demand will also be extended. Under the law, a debtor is presumed to be unable to pay a debt if he does not comply with or apply to set aside a Statutory Demand. Now that my company cannot pay, will the revised 6 months’ threshold be applicable? A Letter of Demand ordinarily demands that you do something, whereas a Cease and Desist letter usually demands that you stop doing something. Such assessor has powers to grant relief to achieve a “joint and equitable” outcome. ... A creditor has issued a statutory demand to my company before the commencement of the prescribed period, giving 3 weeks’ notice for repayment. Canada | Currently, all matters scheduled for hearing in the Supreme Court from April 7, 2020 to May 4, 2020 will be adjourned unless the matter is assessed to be essential and urgent. As mentioned above, the MAS has clarified that other than the right to commence legal action for default on a loan covered under the COVID-19 Act, the contractual rights of banks are not affected by the Temporary Measures. Details and instructions on how to disable those cookies are set out at, Washington DC *associate office **alliance, Bankruptcy, financial restructuring and insolvency, Data protection, privacy and cybersecurity, Environmental, social and governance (ESG), Anti-Facilitation of Tax Evasion Statement, Singapore introduces COVID-19 (Temporary Measures) Act 2020, Contracts: suspending certain contractual obligations, Bankruptcy and insolvency proceedings: limiting certain bankruptcy and insolvency proceedings, Meetings: regulating certain conduct of corporate meetings, Court proceedings: court proceedings being carried out using remote communication technology. �)�H�VՕB�/�J��RӺ@�&}bo�:N��`��T�7���Ԋ\��uR�T��l��z�[ؿ�h0>��� �+) ��P�h�����_���)�@� A creditor has served a statutory demand on the company for a sum of S$15,000 or above, and the company fails to pay the sum, or to secure or compound it to the creditor’s reasonable satisfaction, 3 weeks from the date that the demand was served; At the end of the prescribed period, those contractual obligations will continue unabated. Recent changes to the Civil Aviation Safety Regulations 1998 (CASR) and the introduction of a new Part 139 (Aerodromes) Manual of Standards 2019 (new MOS) are currently presenting challenges to small aerodrome operators. endstream endobj 20) that the debtor is unable to pay his debts, and should therefore be made bankrupt. %PDF-1.6 %���� Global | 444 0 obj <<716721d33892e0ab9168df4e86247e40>]>>stream There will be no appeals following a determination by an assessor. Australia | *�]����(�����~]V�@Q���>��s�ҹ���:���2R�7D��#��. The monetary threshold for the Debt Repayment Scheme (a pre-bankruptcy scheme administered by the Official Assignee for the debtor to repay debts over a period of time not exceeding five years will be increased from S$100,000 to S$250,000. Contact expert statutory demand solicitors now. In other words, they apply retrospectively. Introduction Bankruptcy – the “financial death” of a person – brings with it numerous obligations and disabilities on the part of the bankrupt, as provided for under the Bankruptcy Act, Cap 20 (the “BA”). Significantly, the banks’ contractual rights to charge fees and interest for non-payment or late payment of loan obligations is not affected by the COVID-19 Act. After a Statutory Demand demanding payment is served on a debtor and the debtor does not make payment within 21 days or apply to the Court to set aside the Statutory Demand within the same period, the creditor may proceed to file a creditor’s Bankruptcy Application against the … TRIYARDS Holdings has received a statutory demand from OCBC, dated Sept 5, for about US$11.57 million and 1.13 billion Vietnamese dong (S$67,310), the troubled marine operator announced on Friday after market close. Read more at The Business Times. Any Scheduled Contract entered into before March 25, 2020 with contractual obligations to be performed on or after February 1, 2020 will be subject to the Temporary Measures. Court proceedings may be conducted remotely including from witnesses and accused. Loan facilities extended by other lenders not licensed under the Banking Act or Finance Companies Act may not be affected by the COVID-19 Act. 429 0 obj <>stream Legal News & Analysis – Asia Pacific - Singapore – Insolvency & Restructuring - Regulatory & Compliance 10 January, 2016 A failure by a debtor to satisfy a statutory demand for payment is a ground for a meritorious creditor to commence bankruptcy proceedings against the debtor under the Bankruptcy Act (“the Act”). A creditor can only file a bankruptcy application against you if you do not comply with a Statutory Demand (that has been served on you to demand for payment). Only the following types of contracts set out in the schedule to the COVID-19 Act (the Scheduled Contracts) may be subject to relief as part of the Temporary Measures: a) Leases or licenses of non-residential immovable property b) Construction or supply contracts c) Performance bonds or equivalent granted pursuant to a construction or supply contract d) Contracts relating to the provision of goods and services for events e) Contracts relating to the provision of goods and services relating to tourism f) Cer… A statutory demand is a document that is, or purports to be, a demand served upon a company under the Australian Corporations Act 2001. Following our previous article (COVID-19 (Temporary Measures) Act 2020: Legal circuit breaker), a number of regulations were introduced on 20 April 2020 which sets out the relevant details and processes for a party which seeks temporary relief for contractual non-performance as well as the dispute resolution mechanism where there is a dispute regarding a party's entitlement to such relief. Non-contractual obligations are not included in the COVID-19 Act and accordingly will not be subject to the Temporary Measures. This website is a PLUS initiative. A notification for relief may be issued even before a demand for performance is made by the counterparty. Background Under Section 254 (2) (a) of the Singapore Companies Act, a company can be wound-up by the court upon the application of a creditor who has served a statutory demand on the company for a debt of SGD 10,000 or more and the debt continues to … A stepping stone to the commencement of bankruptcy proceedings is the issuance of a statutory demand. All social distancing measures will override any current legal requirements concerning meetings. The failure to pay the Judgment sum as set out in the statutory demand gives rise to a statutory presumption under the Bankruptcy Act (Cap. It is possible that even after the end of the COVID-19 pandemic, such alternative arrangements may become a permanent platform for meetings heralding the “new normal” for corporate meetings.
2020 statutory demand singapore